Coal Age

AUG 2016

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4 www.coalage.com August 2016 news Politicians Urge BLM to Lift Moratorium The governor of the nation's largest coal producing state, Matt Mead of Wyoming, has entered formal comments of opposition to Secretary of the Interior Sally Jewell as well as Bureau of Land Management (BLM) Director Neil Kornze regarding the former's moratorium on federal coal leases. In a 76-page letter sent July 29 that also included 4,179 pag- es of attachments to back up his positions, Gov. Mead voiced his strong disagreement with the moratorium, which began on Jan- uary 15, calling it an attempt by the Department of the Interior (DOI) to bypass Congress and impose a carbon tax. Moreover, he added, he and state regulators were not made aware of the plans. "States like Wyoming, where coal is produced and environ- mental stewardship is a model for the nation, were not consulted and were caught by surprise," Mead wrote in his letter. "Now, na- tional revenues, energy users across the nation, coal miners and their families are at risk. The justification for this moratorium and the manner it was unveiled are unjustifiable." Mead noted that the moratorium will have a significant im- pact on jobs as well as the nation's energy security and indepen- dence. He has also previously said the DOI should already know "the federal coal program is not broken" and that the moratorium "sets a course with no objective and no end." To put the issue in scope, Wyoming produces 40% of the na- tion's total coal production; 80% of that stems from mining on fed- eral land. "The BLM needs to stop the PEIS [Programmatic Environ- mental Impact Statement], but at a minimum, it needs to commit in writing what it has promised repeatedly, that the PEIS will be completed by January 15, 2019, and, completed or not, that the moratorium will expire on that date," Mead said. "I will continue to oppose the administration's unjustified approach to coal." During mid-July, a group of nine U.S. senators from across the nation's coalfields have issued a letter to Jewell calling on the agency to suspend both its review of the current federal coal pro- gram and the moratorium placed earlier this year on new coal leases. The letter, signed off on by Sens. John Barrasso and Mike Enzi of Wyoming, Roy Blunt of Missouri, Shelley Moore Capito of West Virginia, Steve Daines of Montana, Cory Gardner of Colorado, Or- rin Hatch and Mike Lee of Utah, and John Hoeven of North Dako- ta, was delivered July 14. In it, the group said it has concerns over the report, "The Eco- nomics of Coal Leasing on Federal Lands: Ensuring a Fair Return to Taxpayers," which was released on June 22, stressing that the b r e a k i n g n e w s Peabody Energy's DIP Business Plan Approved As it continues to move toward emerging from Chapter 11 bank- ruptcy, Peabody Energy said August 10 that the business plan that will set the basis for its plan of reorganization has been approved by its debtor-in-possession (DIP) lenders. In its plan, Peabody has projected sales volumes of 168 million tons this year and will rise to between 194 million and 197 million tons annually between 2018 and 2021. Revenues will hold stable at $4.4 billion to $4.6 billion. The company is seeking to implement a "diversified platform" that will generate positive cash flows across all of Peabody's busi- ness cycles while also producing returns to fuel its future growth initiatives. "Within the Americas, this includes an unmatched port- folio of assets in the PRB (Powder River Basin) and Illinois Basin that continues to create value in the face of reduced coal demand," it said. "Within these basins, the company, among other things, looks to drive lower costs through synergies and provide greater value, whereas in the Southwest and Colorado, the company antic- ipates managing for cash generation." In Australia, the plan's focus reinforces its core interests, both metallurgical and thermal. "The company anticipates a smaller but more profitable platform focused on high-quality products and/or top-tier assets to capitalize on higher growth in Asia," adding that a reduction of metallurgical volumes over the plan's five-year life is being contemplated with the assumption of strong Australian currency and no "major uplift" in pricing. Peabody Energy President and CEO Glenn Kellow noted that Peabody can potentially not just survive, but also thrive long-term despite market obstacles. "We are pleased to advance a realistic plan that recognizes both the challenges and opportunities related to the company and industry," he said. "As Peabody focuses on emerging stronger from the Chapter 11 process, we look to cap- italize on our strengths, build upon our positive operating perfor- mance, reduce our overall debt and fixed charges, and pursue ad- ditional improvements for long-term success. Peabody has a strong asset base and skilled workforce intent on creating maximum value in an essential industry." The company is hoping to enter its reorganization plan by the end of the year. Peabody's current mining portfolio stretches over eight states; its controls a total of 6.3 billion tons of coal reserves in the United States and Australia. Wyoming Gov. Mead wants the BLM to lift its moratorium a federal coal leases.

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