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July/August 2018 www.coalage.com 7 news continued power to OMU under a six-year contract that starts about two years from now. The future of Elmer Smith, along the Ohio River just east of Owensboro, has been up in the air for a couple of years. The plant's two coal units went into commercial operation in 1964 and 1974, respectively, and are nearing the end of their useful lives. In 2016, the Owensboro Utility Commission unveiled plans to retire Smith Unit 1 in 2019, with Smith Unit 2 to be shuttered in 2023. What followed, however, were months of reassessment that included a key managerial change at the utility. Most of the re-evaluation centered around Unit 2, the newest and largest unit, and at one point, it appeared Elmer Smith's overall longevity might be extended by several years. But in the end, the utility commission opted to close both Elmer Smith units in 2020, saying that decision was most eco- nomical for customers. Precisely when in 2020 Elmer Smith will go dark is still an unanswered question. OMU spokeswoman Sonya Dixon said it depends on several factors, including a plant decommissioning study currently under way and the fi nal disposition of existing coal supply contracts with the plant's suppliers: Peabody Energy, Armstrong Coal, Western Kentucky Minerals, KenAmerican Re- sources and Sun Energy. Both Armstrong and KenAmerican are owned by Ohio-based Murray Energy, the largest privately owned coal company in the United States. Together, those companies are contracted to supply more than 1 million tons of high-sulfur steam coal to OMU annually for a couple more years. However, under a force majeure declared by the utility two years ago because of overfl owing coal inventories, it has been taking only about 80% of contract minimums. The force majeure could be lifted later this year if a hot summer burns down stockpiles, and so far, the summer of 2018 is off to a swelter- ing start in the Owensboro-western Kentucky region. When it comes to coal generation, it could be said that OMU's loss is Big Rivers' gain. Just a few years ago, Big Rivers was dealt a crushing blow when two large aluminum smelters in the region owned by Cen- tury Aluminum Co. exited a longstanding power supply agree- ment and began buying lower-cost electricity from the wholesale market. That slashed Big Rivers' load by more than 800 MW, or 60%. Initially, the change imperiled the Wilson plant near Matan- zas in Ohio County, Kentucky. Wilson was built in the early 1980s. But the co-op began to pursue off-system power sales more actively and inked several long-term deals with utilities in Nebraska. Now, with the OMU power supply contract, at least the short- term futures of Wilson and Green, located near Sebree, Kentucky, seem relatively secured. Big Rivers spokeswoman Jennifer Keach said her co-op "will continue to run those plants to fi ll the contracts." That should mean Green and Wilson are safe from retirement for at least most of the next decade. Next year, Big Rivers will cease operating the 312-MW Station Two coal plant near Robards, Kentucky, having decided to ter- minate a longstanding arrangement with the city of Henderson, which owns the facility. lion tons of coking coal. Erdenes Tavan Tolgoi generated a profi t last year of 461 billion tugrik ($187.7 million) on revenue of 1.2 trillion tugrik. It posted a profi t of 80 billion tugrik in 2016. Most of its output is exported to China. The company has been on a bumpy ride to market, amid volatility in commodity markets and Mongolian politics as well as unrealized corporate alliances. Shares in the company were dis- tributed for free to the public in 2012 ahead of a planned $3 billion stock market listing; the country's economy then one of the fastest growing in the world. As coal prices declined, Erdenes came into confl ict with Alu- minum Corp. of China, which had provided $350 million in fi nanc- ing in exchanging for a pledged supply of coal. In 2015, Mongolia's Parliament blocked a $4 billion deal for a consortium led by China Shenhua Energy and Japan's Sumitomo Corp. to take over management of Tavan Tolgoi. The Mongolian public has yet to receive any dividends on their 15% holding in Erdenes shares, but company offi cials prom- ised payouts will start later this year. Government offi cials, how- ever, have backed away from plans to make the public's shares tradeable as part of the stock listing plan. They worry many Mongo- lians will immediately dump the stock after years of waiting for the chance, depressing the share price. Indonesian Coal Output Rising in 2018 This year's coal production in Indonesia is likely to top last year's fi gure of 461 million metric tons (mt), according to Indonesian Investments. Coal production in 2018 may also exceed the production quota that was set by the Indonesian government as the nation's coal miners are eager to boost coal production amid stronger coal prices. Through the Energy and Mineral Resources Ministry, the Indonesian government targets a total coal production fi gure of 485 million mt in full-year 2018. The key reason why the government wants to limit coal production is to safeguard enough supplies for future use, especially for domestic use. However, Bambang Gatot, director general for coal and min- erals, Energy Ministry, said he would not be surprised to see actual coal production exceeding the quota this year, particularly as there are many mining business license-holders on Kalimantan and Su- matra who are eager to generate profi t after experiencing tough times in recent years. Meanwhile, the government's 2018 coal production quota is actually much higher than the target that was set in Indonesia's National Medium Term Development Plan 2015-2019. In the RPJMN 2015-2019, the government targeted coal production at 406 mil- lion mt in 2018, followed by 400 million tons in 2019. The rapidly recovering coal price, however, made it basically impossible for authorities to push coal production down to those levels. According to data from Indonesia's Energy and Mineral Re- sources Ministry, a total of 145 million tons of coal was produced in the January to May 2018 period. Exports reached 105 million tons, while 40 million tons were supplied to the domestic market. Poland JSW Sees Coal Output of 15.4M MT European Union's biggest coking coal producer JSW SA expects its coal output will rise to 15.4 million mt (mt) this year, according to Economic Times. Chief Executive Offi cer Daniel Ozon said, "The planned 2018 output amounts to 15.4 million mt, adding that the plan will be achieved despite recent accident in Zofi owka mine where fi ve miners died after a tremor hit the mine." Last year, JSW produced 14.8 million mt of coal. Continued from p. 6...