Coal Age

FEB 2013

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news continued TOP 10 COAL-PRODUCING STATES W O R L D (in Thousand Short Tons) Week Ending (1/26/13) YTD ���13 Wyoming 27,947 West Virginia 8,894 Kentucky 6,770 Pennsylvania 4,002 Illinois 3,251 Texas 2,952 Indiana 2,641 North Dakota 2,094 Ohio 2,050 Montana 1,559 YTD ���12 33,988 9,696 7,772 4,379 3,365 2,780 2,833 2,085 2,069 2,746 % Change -17.8 -8.3 -12.9 -8.6 -3.4 6.2 -6.8 0.5 -0.9 -43.2 Cerrejon Workers Strike in Colombia Following a series of talks, workers at Colombia���s biggest coal exporter, a joint venture between BHP Billiton, Anglo American and Xstrata, are striking over wages, union officials announced. The Cerrejon impasse is just the latest problem for the world���s fourthlargest coal exporter whose extractive companies have been plagued by increased rebel attacks and labor unrest in recent years. The strike, with near total union support, will not mean immediate stoppage, however. Under Colombian law, workers cannot walkout the day after the vote. The union seeks a 7% annual wage increase; Cerrejon has offered 5%. Cerrejon produced 34.6 million metric tons (mt) of coal last year, 4% more than expected and exported 32.8 million mt, 2.5% above its goal. U.S. Total 81,300 -14.1 69,825 Code of Federal Regulations Part 104, has been submitted to the Federal Register for publication. It will ensure that mine operators monitor and address the most hazardous safety problems in their mines. It also strengthens MSHA���s hand to respond to dangerous mining conditions, and improve safety and health for mining���s most important resource���the miner. The following are among the final rule���s major provisions: ��� Allows MSHA to issue a POV notice without first issuing a potential POV notice. ��� Eliminates the existing requirement that MSHA can consider only final orders in its POV review. ��� Establishes general criteria and procedures that MSHA will use to identify mines with a pattern of S&S; violations. ��� Reinforces mine operators��� responsibility for compliance with MSHA safety and health standards, and for monitoring their mines��� compliance. ��� Clarifies that MSHA will consider a mine operator���s effective implementation of an MSHA-approved corrective action program as a mitigating circumstance in its POV review, if the program contains definitive benchmarks implemented prior to POV notice, and the operator has reduced S&S; violations. ��� Restates the statutory requirement that, for mines in POV status, each S&S; violation will result in a withdrawal order until a complete inspection finds no S&S; violations. In April 2011, MSHA launched an online monitoring tool that enables mine operators, miners and the public to determine, based on the most recent data available, how a specific mine matches up with the criteria for a potential pattern of violations. Under the final rule, the online tool will continue to be available to measure compliance performance against POV criteria. Despite Challenges, Alliance Continues to Set Records Records continued to be set by Alliance Resource Partners in 2012, an otherwise challenging year for the United States coal industry. For the 12th year in a row, the Tulsa, Okla.-based company established new benchmarks in several areas, including coal production and revenues. Alliance produced 34.8 million tons of coal last year, up 13.2% from 2011. For the first time, the company topped $2 billion in total revenues in 2012, although net income fell from $389.4 million to $335.6 million, primarily because of increased depreciation, depletion and February 2013 N E W S �� �� �� �� Heavy Rains Slam Australia���s Queensland Coal Mines Heavy rains are again disrupting coal mining in Queensland, West Australia, though effects are believed far less severe than the 2011 devastation that brought much of its production to a standstill. BHP Billiton, the biggest player, has lost production from coking mines in its Bowen Basin after roads and other infrastructure were hit. Meanwhile, the BHP Mitsubishi Alliance joint venture��� the world���s biggest seaborne coking shipper���has received major rains in places previously deemed unaffected; a full survey is under way. Anglo American, Australia���s second-largest coking coal producer and the Chinese majority-owned Yancoal have also closed mines. Yancoal���s Middlemount open cut mine, jointly owned with Peabody Energy, has also been shuttered temporarily after a levee breach. Similarly, Aurizon said parts of its network were closed. Ship loading at Port of Gladstone and Hay Point���the world���s biggest harbor for metallurgical coal shipping���was also temporarily suspended but is now restored. Neptune Terminals Plans to Double Coal Exports A public battle is under way in Vancouver between environmental activists and Neptune Terminals over its bid to double its export coal volume. Neptune filed two applications with Port Metro to upgrade and change equipment increasing coal train unloading. If approved, the plan would increase met coal handling from a minimum of 8 million metric tons per year (mtpy) to 18 million mtpy. The expansion, Neptune President Jim Belsheim said, will help the local economy while creating more than 180 new jobs. Rio Tinto Fires CEO Tom Albanese Rio Tinto has announced the firing of CEO Tom Albanese stemming from $14 billion in write downs in connection to takeovers of the Alcan aluminum group and Mozambique coal producer Riversdale Mining Ltd. Rio Tinto is writing down 70% of Albanese���s two-yearold, $4.1 billion purchase of Mozambique coal company Riversdale Mining Problems with transportation and logistics, common to the region, also dogged profits. Doug Ritchie, who led that acquisition, will also leave ���by mutual consent��� along with Albanese. Continued on pg 8... www.coalage.com 7

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