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a total of six surface mines, six underground operations and five facilities, all in Pennsylvania. In related news, Alpha also confirmed in the earnings release that it has pushed back its planned early 2015 permanent idling of the Emerald longwall operation in southwestern Pennsylvania to the end of next year. "The Emerald longwall mine will operate only through the sec- ond panel in district D," officials said. "[The mine] will be con- ducting development work with minimal production during the first quarter of 2015, likely resulting in higher overall eastern cost of coal sales per ton during that period." James River Records $503M Loss in Sale The August 29 sale of bankrupt James River Coal Co.'s Hampden, Hazard and Triad mining complexes in Central Appalachia and the Illinois Basin to JR Acquisition LLC, a wholly owned subsidiary of Blackhawk Mining LLC, for $52 million, resulted in James River recording a preliminary loss of $503 million on the transaction, according to a bankruptcy court filing in October. James River also told the court the Richmond, Virginia-based company had $24.9 million in cash and cash equivalents of $77.1 million in restricted cash as of August 31 as it continues to unwind its business. James River and 33 affiliates filed for Chapter 11 reor- ganization on April 7 in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond. Since then, James River has sold off most of its most valuable coal assets in court-approved sales. Peter Socha, who joined James River in 2003, resigned as chairman and CEO when the Blackhawk deal closed on August 29. In August, James River reported a gross operating loss of about $28,000. The company had total revenue of about $348,000, including some $328,000 in coal sales. But it cost about $376,000 to produce that coal, the company said. When it filed for bankruptcy, James River and its subsidiaries entered into a debtor-in-possession agreement that included a $110 million term loan facility from a syndicate of lenders, with Cantor Fitzgerald Securities acting as administrative agent and collateral agent. James River initially borrowed $80 million on April 10, followed by another $30 million on June 13, and had repaid $70 million of the outstanding principal on the DIP facility through August 31. The bor- rowings were used to fund the operational and working capital needs of James River, along with other bankruptcy case-related costs. Blackhawk's $52 million purchase price consisted of $20 mil- lion paid to the sellers, a $27 million third lien-secured promissory note delivered to the sellers and a $5 million second lien-secured promissing note delivered to one of James Rivers' lessors. Blackhawk, based in Lexington, Kentucky, expects the James River acquisition to increase its annual production of thermal and met- allurgical coal to more than 9 million tons annually. On September 24, the Pension Benefit Guaranty Corp., which protects the retirement incomes of more than 44 million American workers, announced that it will pay retirement benefits under James River's retirement plan up to the legal maximum of $59,320 a year for a 65-year-old retiree. According to PBGC, the retirement plan is 61% funded with $74 million in assets to pay $121 million in benefits. The agency expects to cover $44.6 million of the $47.1 million shortfall. James Rivers' pension plan ended on August 31. n e w s c o n t i n u e d Additionally, union regional secretary Stanley Lebelo told Bloomberg that the NUM will apply for a second strike at other Glencore operations. Overcapacity Driving China's Coal Industry Into the Ground With coal prices spiraling downward, major Chinese coal firms are going to sink even further into the red unless they can improve and adapt their operations to the new industry climate, reported Shanghai's China Business News . In the first three quarters this year, 20 major Chinese coal firms suffered a total net deficit of 10.56 billion yuan ($1.7 billion), with only seven of them managing to scrape in a slim profit. Combined accounts receivable also topped staggering 130 billion yuan ($21.2 billion), according to the report. One major culprit for the industry's vexing problem is excess capacity, a result of two rounds of vigorous investments in the industry since 2006 in response to the booming market. The inflow boosted the industry's total annual capacity, including production facilities under construction, to an enormous 5 billion metric tons per year (mtpy), with accumulated investments reaching upward of 3 trillion yuan ($490 billion). The nation's coal capacity now stands at 4 billion mtpy, 300- 400 million mt more than demand. "Due to overcapacity, the nation's coal stock has topped 300 million tons for more than 30 months in a row and it will be very difficult to cut the stock in the foreseeable future," said Lu Yaohua, vice chairman of the China National Coal Association. Indonesia to Build Huge Coal-fired Power Plant Government officials said that Indonesia will begin building a huge coal-fired power plant next year, as Southeast Asia's biggest econo- my looks to keep pace with soaring electricity demand and avert a power crisis. Indroyono Soesilo, head of the new coordinating min- istry for maritime affairs, told Reuters that the 5,000-MW Cilacamp power plant will be built in central Java and generate an initial 2,000 MW when it outstripped a rise in generating capacity, leading to frequent blackouts in cities and leaving rural areas without regu- lar power supply. "We need 35,000 MW of additional electricity capacity in the next five years," Soesilo said. Without new capacity we will have an electricity crisis." Indian Power Producer May Become a Major Coal Operator The Hindustan Times reported that in line with the government's plans to boost domestic output of coal, India's largest thermal pow- er producer, National Thermal Power Corp. Ltd. (NTPC), could soon become one of the major coal-producers of the country as well. "NTPC plans to produce up to 300 million metric tons (mt) of coal within the next four to five years," said Arup Roy Choudhury, CMD of NTPC. "As we expect more coal blocks coming to us, NTPC wants to be self-reliant in its coal requirements." At present, the company meets 90% of its annual coal requirements of 160 million mt from Coal India Ltd. With a total power generation capacity of more than 43,000 MW, NTPC has 10 coal blocks with reserves of around 5 bil- lion mt and production potential of 100 million mt of coal. Continued from p. 6... Continued on p. 10... 8 www.coalage.com November 2014