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reposition its Central Appalachian (CAPP) business into the specialty coal and industrial coal markets that typically result in premium pricing. During the first quarter of 2016, the mine near Clairfield in Claiborne County is expected to undergo a quick ramp-up, accord- ing to George Dethlefsen, the company's president and CEO. Although Cooper Ridge technically produces steam coal, usually sold to electric utilities, its quality will enable Corsa to s e l l i n t o t h e i n d u s t r i a l a n d s p e c i a l t y c o a l m a r k e t , h e s a i d . Dethlefsen declined to disclose Cooper Ridge's projected out- put, although another company official last year indicated the mine will produce about 200,000 tons a year. Cooper Ridge is operated by Corsa's Kopper Glo Mining subsidiary. The company's Casselman underground mine in Garrett County, Maryland, meanwhile, has successfully completed a challenging geologic transition under the Casselman River. Despite a challenging coal pricing environment in 2015, C o r s a a c h i e v e d p o s i t i v e a d j u s t e d E B I T D A a t i t s C A P P a n d Northern Appalachian (NAPP) divisions. The company expect- ed to sell between 1.67 million and 1.81 million tons of steam and metallurgical coal in 2015, down from previous projec- tions of more than 2 million tons. Corsa sold 1.64 million tons in 2014. Currently, the company operates two underground and two surface mines in CAPP and two underground and two surface mines in NAPP. In early 2015, Corsa idled the Kimberly Run and Barbara No. 2 underground mines in Pennsylvania, primarily because of weak market conditions. Kimberly Run and Barbara were among several former PBS Coals operations Corsa took over in August 2014 after paying $60 million to buy them from Russia's OAO Severstal. Kimberly Run and Barbara subsequently have been sealed. While inactive, the Horning underground mine in Somerset County, Pennsylvania, has not been sealed. Last May, Corsa restarted the Quecreek No. 1 underground mine in Somerset County after securing a long-term steam coal sales contract that allowed Corsa to economically mine its steam and met coal reserve base. Paringa Resources Inks 7-year Contract With LG&E; Australia's Paringa Resources Ltd. said a new study confirmed the economics for its proposed Buck Creek No. 1 steam coal underground mine in western Kentucky are even more com- pelling than previously thought, especially since the company recently executed a seven-year, 4.75-million-ton "cornerstone sales agreement" with Kentucky's largest electric utilities, Louisville Gas & Electric Co. and Kentucky Utilities Co. (LG&E;/KU). The LG&E;/KU contract covers an initial two-year construc- tion period — 2016 and 2017 — for the mine to be located near the Green River along the Hopkins County/McLean County bor- der, plus a five-year production period from 2018 through 2022. LG&E;/KU, subsidiaries of Pennsylvania's PPL Corp., are two of the largest fuel buyers within Paringa's target Ohio River market. The two utilities serve more than 1 million customers and own about 8,000 megawatts (MW) of mostly coal-fired generating resources. Buck Creek 1 is expected to produce about 3.8 million tons of western Kentucky No. 9 coal annually, with estimated total operat- ing costs of $29.37/ton and average sales prices received of $45.99/ton in fiscal year 2018 and $55.63/ton in fiscal year 2035, according to results released in December from its bankable feasibil- ity study. The mine has an initial marketable reserve of approximate- ly 83 million tons of coal, enough for at least an 18-year life. David Gay, Paringa president and CEO, said the study con- firmed the mine "will be a world-class, low-capex, high-margin coal mine, and will generate EBITDA of more than $87 million per year, even at current depressed coal prices." Perhaps just as important, he said, the study concluded it will cost about $105 million to construct the mine, considerably lower than a previous projection of $127 million. The company said it is in advanced discussions with equity and debt financiers and expects to close on financing for the new mine in early 2016. A roughly 18-month construction peri- od then will begin with the mine up and running in late 2017 or early 2018. With the required environmental permits already in place for Buck Creek 1, the study was in the final stage before the start of construction, Gay noted. Paringa said it hopes to secure additional sales contracts by participating in ongoing and future coal solicitations by utilities in the region. In addition, the company "will assess opportuni- ties to sell coal into a secondary target eoutheast market, which is a growing market for Illinois Basin coal," it added. Parringa has begun to assess opportunities to incrementally expand production at the Buck Creek complex, and results of a "scoping study" for a proposed Buck Creek No. 2 underground mine are expected to be released soon. Buck Creek 2 would be somewhat smaller, producing about 2 million tons a year. It has not yet been fully permitted. Frasure Creek Mining to Pay for Water-quality Violations Frasure Creek Mining entered into a settlement in December with a coalition of citizens groups and the Kentucky Energy and Environment Cabinet to resolve years of litigation over alleged water-quality violations at its former surface mines in eastern Kentucky. Although the company agreed to the $6 million settlement, it was only required to make an upfront payment of $500,000 to the state. The full $6 million would be due if the company defaulted on the $500,000 fine. Neither Frasure Creek Mining, which currently does not mine in Kentucky, nor its parent, Trinity Coal Corp., are allowed to obtain new mining permits in the commonwealth unless they first pay $2.75 million, according to the deal worked out in the final days of Gov. Steve Beshear's administration. Beshear, a two-term Democrat from the western Kentucky coalfields, left office in early December and was succeeded by Republican Matt Bevin. "This settlement should send a strong signal to the new administration that citizens can and will hold the state account- able for vigorously enforcing laws against polluters to ensure the health of our waters and communities," said Erin Savage, Central Appalachian coordinator for Appalachian Voices, one of the groups that threatened to sue the company in 2010. n e w s c o n t i n u e d January 2016 www.coalage.com 13