Coal Age

JUL 2013

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news continued TOP 10 COAL-PRODUCING STATES W O R L D (in Thousand Short Tons) Week Ending (6/29/13) YTD '13 Wyoming 183,967 West Virginia 59,112 Kentucky 43,653 Pennsylvania 28,527 Illinois 24,856 Montana 20,833 Texas 19,775 Indiana 18,360 North Dakota 13,883 Ohio 13,783 YTD '12 192,829 62,929 48,952 29,489 23,890 17,373 19,792 18,708 13,436 14,415 % Change -4.6 -6.1 -10.8 -3.3 4.0 19.9 -0.1 -1.9 3.3 -4.4 U.S. Total 506,396 -4.3 Judge Orders Pike River to Compensate Widows, Company Claims it Has No Money Pike River Coal says there is no cash in its coffers to pay courtordered compensation to the families of victims of the 2010 mine explosion—despite the personal wealth of its former directors and the assets of its biggest shareholder, according to the New Zealand Herald. The company was sentenced in the Greymouth District Court on July 4 over health and safety failings that led to the deaths of 29 miners in November 2010. Judge Jane Farish ordered Pike River Coal to pay a total of $3.41 million in reparation—$110,000 for the family of each victim and survivors Russell Smith and Daniel Rockhouse. She also fined the company a total of $760,000 over nine charges. Pike River Coal is in receivership and indicated during sentencing that it had only enough money to pay $5,000 to each family. But Judge Farish slammed the claim, and said the company had a "total lack of remorse." Farish indicated that Pike's biggest secured shareholder, NZ Oil and Gas (24.9%), was in a position to pay reparation. Last August, NZ Oil and Gas posted a full-year profit of $19.9 million. Pike River receiver John Fisk said it was impossible for the firm to comply with Farish's order. It had $2 million worth of liability insurance, but after legal fees were paid, just $156,000—or about $5,380 per family—was still available for compensation payments, he said. 484,813 committed to the Tennessee Valley Authority under a long-term favorably priced contract. Bowie has a state-of-the-art 650-tph heavy-media wash plant, a 115-car unit train loadout facility, and produces "super-compliance" bituminous coal. The Bowie mine has 325 employees and, like Canyon Fuel, has consistently ranked in the top 10 of most productive and safest longwall operations in the U.S. "The Bowie employees' motto of 'the best of the best' dovetails perfectly with the work ethic and commitment to excellence that has long been the hallmark of the workforce at Canyon Fuel. We are proud to bring these two exceptional teams together, and we believe this merger of industry talent gives us the opportunity to create something very special," Siegel said. Bowie has a long-term agreement with Metropolitan Stevedore Co. for the Port of Stockton, which will provide BRP with the opportunity to ship up to 2.3 million tons annually, as the Metro Ports/Stockton agreement will be assigned by Bowie to BRP. Separately, Bowie has been in negotiations with Levin Richmond Terminal Corp. for the Port of Richmond, which would provide BRP with annual "topping off" capacity of an additional 1.2 million tons. Bowie has also signed a Letter of Intent for significant export capacity via a Pacific port in the northwestern U.S., which would also be assigned to BRP. "We think the time is right to introduce the new 'Bowie Brand' into markets where the need and appetite for coal-fired power generation is growing, not abating. In that regard, we are excited to have the opportunity to take advantage of (our marketing partner) Trafigura's global coal sales platform," Siegel said. D.C. Circuit Court Upholds Determination Involving MSHA's Emergency Lifeline Standard The Mine Safety and Health Administration (MSHA) applauded a decision by the U.S. Court of Appeals for the District of Columbia Circuit, which held that the failure to maintain emergency lifelines in a manner for miners to use effectively is a significant and substantial (S&S;) violation of the Federal Mine Safety and Health Act of 1977, regardless of the likelihood of a mine emergency actually occurring at the time of the violation. In its June 7 ruling, the court unanimously upheld the secretary of labor's interpretation that, in evaluating the significant and substantial nature of violations of standards that come into play only in the event of an emergency, one must assume the occurrence of the emergency. July 2013 N E W S ¸ ˛ ˝ ¸ Mechel Signs Agreement with China's Shasteel Mechel OAO, one of the leading Russian mining and metals companies, has signed a coking coal supply agreement with China's Shasteel Group. According to the signed agreement, Mechel Carbon (Singapore) will directly supply Shasteel Group with 40,000 to 80,000 metric tons (mt) of coking coal a month from Russian Far East ports. Coking coal prices will be determined on a monthly basis. Mechel Carbon has supplied more than 500,000 mt of coking coal to Shasteel's main coke plant in Zhangjiagang, Jiangsu Province. Shasteel Group is the largest private steel mill in China, with an annual production capacity of up to 35 million mt of steel. Glencore Xstrata, Peabody Energy Cut Nearly 1,000 Jobs in Australia Glencore Xstrata announced it will cut 450 jobs at two Queensland coal mines on the heels of an earlier announcement by U.S.-based Peabody Energy Corp. officials that they, too, would slash 450 jobs in Australia amid a slowing market. Swiss-headquartered company's Newlands and Oaky Creek mines in central Queensland will see reduced production, leading to retrenchments by Q4 2013, according to the Australian Associated Press. Peabody Energy, meanwhile, announced elimination of 450 contractor positions at a project in Queensland and another in New South Wales. Company representatives plan to replace them with full-time employees. "Against a backdrop of lower coal prices, high input costs and the strong Australian dollar, the decision to cut production has been taken to maintain viability," the recently merged Glencore Xstrata said in a statement. At the company's Newlands mine, 300 jobs are Continued on pg 6... www.coalage.com 5

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