Coal Age

SEP 2017

Coal Age Magazine - For more than 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.

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20 September 2017 prb roundup continued Belle Ayr Receives Safety Award Contura Coal West's Belle Ayr mine received the 2016 Surface Mine Safe- ty Award given jointly by the state of Wyoming Department of Workforce Services and the Wyoming Mining Association. Candidates for the annual safety award are evaluated based on in- formation submitted to the state mine inspector, including hours worked and lost-time incidents. The workforce at Belle Ayr completed more than 472,000 work hours in 2016 without a single lost-time accident. "All of us at Contura Coal West are proud of the Belle Ayr employees for their outstanding safety performance this past year," said Shane Durgin, president of Contura Coal West. "2016 was an extreme- ly difficult time for the coal industry and my hat is off to each and every employee at the Belle Ayr mine for their dedication and focus." Wyodak's Perfect Record For the seventh straight year, Black Hills Corp.'s Wyodak mine has operated with a perfect safety record of no lost- time accidents, an industry achieve- ment recognized by the Wyoming mine inspector. And, for the fourth consec- utive year, Wyodak employees have been awarded the Governor's Workplace Safety Award, presented during July by Wyoming Gov. Matt Mead at the annual Wyoming Safety and Workforce Summit in Cheyenne. In operation since 1923, Wyodak is the oldest continuously operating surface coal mine in the United States and the oldest coal mine in the PRB. The mine primarily supplies coal to the adjacent Neil Simpson Complex. With nearly 200 million tons of coal reserves, it could supply coal to these generation facilities through 2055 at current pro- duction levels. Looking Toward the Future Clearly these PRB mines, as a group, are some of the safest coal operations. They have equally impressive environ- mental compliance records, with feder- ally recognized programs for land resto- ration and wildlife habitats. Several coal companies operating in the PRB sought reorganization through bankruptcy and have now exited that process with a clean balance sheet. Profitability is key and almost all of the PRB mines have found and are continuing to find ways to reduce oper- ating costs. Much of the costs for them are beyond their control. Costs for fuel, explosives and electricity should re- main steady. They will need to invest in equipment soon as they have put that aside while weathering the storm. Eas- ing the regulatory burden could also im- prove profitability. Can these mines maintain the cur- rent EIA estimated growth rate of 17.5%? A growth rate of 17.5% would be 368.5 million tons, or an additional 54.9 million tons. As of the end of August, that figure stood at 32.5 million tons. Could these mines add 22 million more tons over the last four months of the year? That would be amazing, but unlikely. A growth rate of 14% or 15% for 2017 would amount to 357.5 million tons to 360.4 million tons, or an additional 43.9 million tons and 46.8 million tons, respectively. If the growth drifts to 8% or 10%, overall PRB production would increase to 338.7 million or 345 million tons, which would be 25.1 million tons or 31.4 million tons, respective- ly. But, that also means that several mines would produce substantially less during the fourth quarter than they did last year. Only time will tell, but that's a signif- icant amount of coal and a year-on-year improvement, which these mines have not seen in the last four years. Much of that tonnage would probably be related to utility restocking and not a direct re- flection of an actual increase in demand, just a projected increase in demand. Looking toward the future, what these PRB operators need most is market sta- bility and demand growth. On a percentage base, the amount of 8,400 Btu per lb coal being sold has steadily decreased.

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