Coal Age

JUN 2013

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news continued % 2 0 1 3 A W A R D S Westmoreland's Jewett Mine Wins Trio of Environmental Awards Westmoreland Coal Co. announced that its Jewett mine in Jewett, Texas, has been recognized by the Texas Parks and Wildlife Department, the Railroad Commission of Texas - Surface Mining and Reclamation Division and the Texas Commission on Environmental Quality for its dedication to environmental excellence. Westmoreland accepted one of five statewide awards from the Texas Parks and Wildlife Department for best conservation practices and awareness of maintaining and enhancing ecosystems. The award recognized the work performed by Westmoreland and its consultants in developing revisions to the agency's Quail and Grassland Bird Land Use reclamation guidelines and for being a leader in the mining industry in developing improved reclamation practices for upland game birds. The Railroad Commission of Texas - Surface Mining and Reclamation Division awarded its 2013 Reclamation Award to Westmoreland for its Advanced Reforestation Practices citing Westmoreland's ability to establish more natural-looking woody species habitats. Westmoreland was also awarded the Texas Environmental Excellence Award in the Innovative Operations/Management category by the Texas Commission on Environmental Equality for its thorough land restoration process. "We are very proud of our Texas operation for being a leader in reclamation and in fostering sustainable practices in the mining industry," said Robert P. King, CEO. "It is particularly impressive that the Jewett mine was awarded a state-level award for environmental excellence when it was competing against all industries and businesses in the state, not just other mining companies." Arch Coal's Sufco Mine Rescue Team Takes Home First Place at Four Corners Western Competition Arch Coal, Inc. announced that Canyon Fuel Co.'s Sufco mine won first place at the Four Corners Mine Rescue Competition held April 23-25 in Farmington, N.M. Sufco's white team took first place in mine rescue among 18 teams from five states. In addition to earning top honors overall, individual Sufco team members Justus Norcross finished first in novice benching and third in the overall bench competition, and Brady Huntsman finished fifth in the pre-shift competition. A total of four Arch Coal subsidiary teams competed in the competition. In addition to Sufco's first-place finish, Skyline's white team placed fourth; Mountain Coal Co. and its West Elk's red team placed eighth; and Dugout Canyon's team placed tenth. The mine rescue competition requires teams to overcome obstacles that may be associated with a mine disaster and to rescue survivors. Teams are judged on their knowledge of mine rescue principles and mapping, as well as organization, attention to detail and teamwork. "What an outstanding performance for Sufco's emergency responders," said Ken May, Sufco's general manager. "When we train and compete, we're continuously improving our skills and furthering safety as a core value." Sufco's white team members are: Justus Norcross, team captain; Brett Nowers, gas man; Evan Johansen, map man; Sean Winn, first aid; Jesse Bell, co-captain; Brady Huntsman, briefing officer; Brady Baker, alternate; Yancy Snyder, alternate; Brett Allred, team trainer; and Gary Leaming, Sufco's safety manager. During 2012, Sufco's employees achieved A Perfect Zero—working more than 750,000 employee-hours without a reportable safety incident or environmental violation. 14 tiously" predicted job losses and production at least have flattened out in eastern Kentucky. Hallador's Ace-in-the-Hole Only months after it acquired the reserves, coal leases and surface properties for $6 million last November, Hallador Energy began producing lower-sulfur coal this spring at its new Ace-inthe-Hole surface mine in southern Indiana's Clay County. Ace's coal is trucked 42 miles to the Carlisle underground mine in Sullivan County, Ind., operated by Hallador's Sunrise Coal subsidiary. Carlisle's high-sulfur coal is blended with Ace's approximately 2 lb/SO ' coal, with a Btu content of 11,400, to meet the quality specifications of an unidentified Hallador customer. At the Clay County location, Hallador controls 3.1 million tons of proven coal reserves, of which it owns 1.2 million tons in fee. The company plans to mine two primary seams of low-sulfur coal at Ace that comprise 2.9 million of the 3.1 million controlled tons. Hallador officials have not said if the customer in question is Jacksonville Electric Authority in Florida, one of the coal company's several major customers. Many utilities in the Southeastern U.S. have installed scrubbers on coal-burning power plants that nevertheless cannot accept typical high-sulfur Illinois Basin coal with a sulfur content of 6 lb/SO2. Hallador also expects to ship low-sulfur Ace coal directly to unscrubbed customers that require a lower-sulfur content coal. Ace's maximum capacity is expected to be around 500,000 tons annually. The company said in May that the mine had 20% of its capacity contracted for 2013 and 2014. Hallador had invested $13.3 million in minerals, land, equipment and development at Ace as of March 31, and anticipated spending another $1.75 million in equipment and development in the remainder of the year. In a U.S. Securities and Exchange Commission filing in May, Hallador said it sold 840,000 tons of coal in the first quarter at an average price of $42.25/ton. That compared with the 701,000 tons the company sold a year earlier, albeit at a higher, about $2/ton, selling price. Carlisle, a continuous miner operation and the company's principal operating mine, produced 876,208 tons in the first three months of 2013, up from 715,932 tons in the first quarter of 2012. Altogether, the mine produced about 3 million tons last year. The lower selling price in this year's first quarter was attributed by Hallador "to the mix of our various contracts and corresponding prices and due to a lower repricing as structured in an existing contract." Operating costs and expenses averaged $27.73/ton in the first quarter of 2013 versus $26.30/ton in the year-ago period. The increase was blamed primarily on poor mining conditions in January and February of this year. Conditions improved in March, Hallador said, with operating costs falling to $26.51/ton. Hallador expects operating costs to average $26-$27/ton for the remainder of 2013. Hallador continues to develop its proposed Bulldog underground mine near Allerton in Vermilion County, Ill. The company currently controls 35.6 million tons of proven and probable reserves, and expects the continuous miner operation to produce June 2013

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