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Issue link: https://coal.epubxp.com/i/863175
July/August 2017 www.coalage.com 5 news continued Prior to this, the Mississippi Public Service Commission (PSC) moved to have Mississippi Power Company and other parties reach a settlement in the Kemper County Power Plant case to rel- icense the plant as a natural gas facility. Also, the PSC moved for a settlement that would, at a minimum, result in no rate increase to customers and shield customers from any risks surrounding the lignite coal portion of the plant. Parties were given 45 days to reach a settlement once the commission entered its order on the matter. The facility in Gulfport was to be the newest large-scale U.S. power plant using integrated gasification combined cycle (ICGG) technology. However, since the 582-megawatt Kemper has been under development, it has been riddled with growing cost prob- lems and project delays, as well as opposition issues. The Liberty mine, which is the sole supplier of coal to fuel the gasifier at the Kemper County energy facility, is not slated for amor- tization per the terms of the agreement now being considered by Mississippi Power, according to the PSC docket. Production levels at the mine, which is operated by Liberty Fuels Co., a subsidiary of North American Coal, were expected to increase gradually to full production of 4.5 million tons beginning in 2023, according to a Form 8-K filed by NACCO, which owns North American Coal. "Should the decision to suspend operations of the gasifier be- come permanent, it will have an adverse effect on North Ameri- can Coal's long-term earnings under its contract with Mississippi Power," the company said in its filing. NACCO spokeswoman Christina Kmetko said the situation was fluid and nothing had been finalized. "Operations are con- tinuing to support the customer," she said. "We will continue to operate under our contract and support the customer as needed." CONSOL Files Plans to Spin Off Coal Business CONSOL Energy has filed the necessary paperwork with the U.S. Securities and Exchange Commission (SEC) to separate the com- pany into two publicly traded companies: a coal company and a natural gas exploration and production (E&P;) company. The spin- off would provide current shareholders ownership in two compa- nies, the company said. "Today's filing represents a significant step toward complet- ing the company's separation, with both entities being well-cap- w o r l d n e w s Zwane Suspends South African Mining Charter South Africa's contentious mining law update, which increased mandatory black ownership, management participation and sup- pliers, has been suspended, the country's Chamber of Mines said on Friday, July 14. The new Mining Charter was introduced last month to the shock of the industry, which had not been consulted in its creation. Among the provisions were an increase of black ownership from 26% to 30%, and at least 70% of all suppliers were to be from black-owned firms. In response, the chamber has applied for a court interdict against the Department of Mineral Resources (DMR) to have the charter set aside. Chamber CEO Roger Baxter said the DMR had agreed to suspend the charter pending a court hearing originally scheduled for July 18. In return for suspending the new charter, the DMR asked the chamber to suspend the original urgent court application, and instead, schedule a hearing at a later date. In essence, the DMR likely fears it will lose in court and its lawyers advise asking for more time to prepare a case. Should the DMR attempt to enforce the new rules, the chamber will reinstate its urgent application. "This is a satisfactory arrangement for the chamber and the industry, whose primary objective through the interdict applica- tion remains to ensure that the DMR's charter does not come into effect, pending a court application to have it reviewed and set aside," Baxter said. Rio Tinto's Coal Deal Cements Ties With China Rio Tinto has tightened ties with China after selling its Austra- lian coal assets to state-backed Yankuang Group for $2.69 billion, China Daily reported. "Instead of a simple deal between two com- panies in the coal sector, it shows Rio Tinto is hoping to expand its Chinese iron ore market," said Mi Pengqi, an analyst at JLC Network Technology Co. Ltd., a commodity information provider based in Beijing. The Australian acquisition certainly created a buzz in the coal sector. Yancoal Australia Ltd., which is part of Yankuang Group, will now take over Rio Tinto's coal mining operations in New South Wales. "This is the transformative deal for Yancoal as we become the largest pure-play coal producer in Australia and a positive sign for continued investment into the local resources sector," Reinhold Schmidt, CEO at Yancoal Australia, told the Financial Times. But the decision by Rio Tinto will create more than a few rip- ples. The deal will increase the pricing power for Chinese coal companies in the Asia-Pacific market, according to Yin Mingde, deputy general manager of Yankuang Group. Mingde pointed out that the acquisition would take Yancoal's coal reserves to 5.71 billion metric tons with annual production running at 42.79 million tons. With the expansion of production capacity, Yancoal would also become an important Australian coal exporter to Japan and South Korea. India's Utility NTPC Bets Big on Coal Contrary to the government's avowed policy, coal will continue to remain the mainstay of India's largest power generation compa- ny, NTPC Ltd. Even with India reiterating its commitment to the Paris climate accord in wake of President Donald Trump's ad- Continued on p. 6... top 10 coal-producing states (in Thousand Short Tons) Week Ending (6/24/17) YTD '17 YTD '16 % Change Wyoming 145,195 120,476 20.5 West Virginia 43,278 36,632 18.1 Pennsylvania 25,164 20,706 21.5 Texas 24,394 18,056 35.1 Illinois 23,538 21,666 8.6 Kentucky 20,755 20,490 1.3 North Dakota 16,534 13,174 25.5 Indiana 15,590 13,651 14.2 Montana 15,104 13,160 14.8 Utah 8,086 6,581 22.9 U.S. Total 376,195 321,184 17.1