Coal Age

APR 2019

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Page 8 of 51

April 2019 7 u.s. news continued continues to place tons for delivery in both 2019 and outer years. At the end of the first quarter, Arch was nearly 95% committed based on the mid- point of its 2019 thermal guidance. B&W Will Open New Mine Central Appalachian steam coal pro- ducer B&W Resources plans to open a new surface mine soon in eastern Kentucky and is hoping to return to the 1-million-ton production thresh- old in 2019. Bill Tallent, the company's long- time vice president of sales, said the Lipari Energy subsidiary intends to open the new Alum Cave surface mine in Knott County, Kentucky, in May. The mine is expected to produce at least 50,000 tons per month, or a minimum of 600,000 tons annually, drawing upon B&W's estimated reserve base of 15 million tons to 20 million tons. B&W currently operates the Yellow Creek surface mine in Knott County and the Aces Branch surface mine in Leslie County, Kentucky. In the past, the company also has operated in the eastern Kentucky counties of Clay, Owsley, Knox and Perry. Tallent said he has been success- ful in securing a couple of "term" coal supply contracts with electric utilities, the company's longtime customer sta- ple, that is allowing for the opening of Alum Cave and potentially higher out- puts at Yellow Creek and Aces Branch. He declined to provide details about the new contracts except to say they should enable B&W to reach or exceed the 1-million-ton standard this year for the first time in several years. "We're probably going to survive," he said. Unlike a growing number of remaining CAPP producers, B&W specializes in thermal coal, not met- allurgical coal. B&W has continued to slog along in recent years as many of its compet- itors went out of business in the re- gion, which has experienced a heavy loss of production and miners. B&W has approximately 150 employees. According to Tallent, B&W's qual- ity coal — it averages about 12,000 Btu/lb — is a major selling point. So is the company's stability and ability to get the coal to market. B&W also operates two prep plants in eastern Kentucky. Looking ahead, Tallent believes the U.S. coal industry is in relatively decent shape. "We feel good about the industry as long as the political climate stays the same," he said. That means the re-election of President Donald Trump, a big coal supporter, next year, as opposed to the election of liberal Democrats such as Bernie top 10 coal-producing states and regions weekly spot prices (Thousands of Short Tons) Week Ending (3/30/19) YTD '19 YTD '18 % Change Wyoming 65,588 75,623 -13.3 West Virginia 22,813 23,176 -1.6 Pennsylvania 11,499 11,851 -3.0 Illinois 11,286 12,496 -9.7 Montana 8,895 8,968 -0.8 Kentucky 8,890 10,127 -12.2 Indiana 8,166 8,387 -2.6 North Dakota 6,922 7,458 -7.2 Texas 5,144 6,004 -14.3 Alabama 3,638 3,860 -5.8 Appalachian Total 46,967 49,489 -5.1 Interior Total 30,705 33,642 -8.7 Western Total 91,048 102,637 -11.3 U.S. Total 168,719 185,768 -9.2 ($/ton) Week Ending (3/29/19) Central Appalachia (12,500 Btu, 1.2 SO 2 ) $83.45 Northern Appalachia (13,000 Btu, < 3.0 SO 2 ) $70.05 Illinois Basin (11,800 Btu, 5.0 SO 2 ) $38.20 Powder River Basin (8,800 Btu, 0.8 SO 2 ) $12.35 Uinta Basin (11,700 Btu, 0.8 SO 2 ) $39.20 Source: Energy Information Administration monthly stats from coal country U.S. News Continued on Page 13

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