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Issue link: https://coal.epubxp.com/i/961722
6 www.coalage.com March 2018 news continued Indonesian President Caps Domestic Coal Prices Reuters reported that Indonesian President Joko Widodo has signed a government regulation authorizing the energy and mineral re- sources minister to set the price of coal for the domestic market. Coal and Minerals Director-General Bambang Gatot told parlia- ment, "Further details on the pricing plan will be outlined in a ministerial decree expected to be announced soon." Government officials said Indonesia plans to keep electricity tariffs and fuel prices unchanged this year and the next by in- creasing subsidies. Indonesian domestic media reported that the energy ministry has agreed to set prices at $70/metric ton (mt). Indonesian coal benchmark price was set at $101.86/mt for March, its highest since May 2012. The government has been working on plans to regulate domestic coal prices since late 2017, and the discussions have impacted some coal miners' share prices. Hwange to Revive Coke Oven Battery in Zimbabwe Hwange Colliery Co. Ltd. (HCCL) has invited bids from companies in- terested in rebuilding a coke oven battery that was decommissioned four years ago, according to Nehanda Radio. The company is looking for bids to either rebuild or build completely new construction of a recovery-type coke oven battery, byproducts plant and gas plant, which includes a coke oven gas supply line to power station and the financing of the project. All bidders are required to demonstrate their capability to provide the required services and expertise and include their track record in the funding/construction of a recovery-type coke oven battery or similar plant. Maintenance of the coke oven battery for a period of 12 months can be offered as an option. Universal Acquires North Block Complex Universal Coal's subsidiary North Block Complex Proprietary Ltd. (NBC) has entered into a sale and purchase agreement with Exxaro Coal Mpumalanga Proprietary Ltd. and Exxaro Coal Proprietary Ltd. for the assets that comprise the North Block Complex. NBC is owned 51% by Ndalamo Resource Proprietary Ltd. (Ndalamo) and 49% by Universal Coal and Energy Holdings South Africa Proprietary Ltd. (UCEHSA). UCEHSA is a wholly-owned sub- sidiary of Universal. Once the North Block Complex is acquired, NBC will operate on a stand-alone basis, but will be managed by UCEHSA. The North Block Complex is located in the Mpumalanga Prov- ince of South Africa and consists of the Glisa and Eerstelingsfon- tein operating mines and the undeveloped Paardeplaats prospect- ing right, which is adjacent to the Glisa mine. It is expected that the Eerstelingsfontein operating mine will be near the end of its life by the time NBC takes ownership of the North Block Complex and that the Glisa operating mine will have a remaining life of mine of approximately two to four years, assuming the transaction is completed on December 31. The North Block Complex is an open-cast operation and has an average production of approximately 3.5 million tons per year. Historically, the mined coal has been sold primarily to Eskom for power generation, with a small amount of higher value sized product sold to domestic traders. The North Block Complex infrastructure consists of a Dense Medium Separation coal beneficiation plant and four crushing and screening plants, two of which will be transferred to NBC and two of which are owned and operated under long-term contracts, a wa- ter treatment facility and a rail siding that provides direct access to the Richards Bay Coal Terminal. Continued from p. 5... (NAPP) shipments, sold primarily into thermal markets, are an- ticipated to be between 7.1 million and 7.7 million tons. As of February 6, 16% of the midpoint of anticipated 2018 CAPP coal shipments were committed and priced at an average expected per-ton realization of $113.53, with an additional 33% committed and either unpriced or priced based on various indi- ces. Based on the midpoint of guidance, 88% of anticipated 2018 NAPP coal shipments were committed and priced at an average expected per-ton realization of $41.96. Contura expects its 2018 CAPP cost of coal sales per ton to range from $68 to $73. NAPP cost estimates are projected to be between $29 to $33 per ton. Additionally, costs related to the com- pany's idle operations are expected to be between $10 million and $12 million for full-year 2018. The margin from Contura's Trading and Logistics platform is expected to average $9 to $15 per ton for the full-year 2018. The margin guidance excludes consideration of any remaining ship- ments relating to the Powder River Basin (PRB) assets that the company divested in early December 2017. Contura's capital expenditures for 2018 are expected to be in the range of $64 million to $74 million, while SG&A; guidance is estimated at $32 million to $36 million, excluding one-time and non-recurring items, annual incentive bonus and stock compen- sation. Depreciation, depletion and amortization for 2018 is ex- pected to be between $40 million and $50 million. The company expects 2018 cash interest expense to be between $25 million and $27 million. Alliance to Mine, Sell More Coal in 2018 Fresh off a year in 2017 when coal production and sales both in- creased, Alliance Resource Partners is reopening its long-idled Gibson North steam coal underground mine in Indiana amid higher sales and production estimates this year fueled in part by continued growth in the export sector. The Tulsa, Oklahoma-based coal producer saw the start of coal market improvements late last year expects them to persist through 2018, Joe Craft, the company's president and CEO. Softer coal markets for much of last year contributed to a de- cline in Alliance's overall net earnings to $303.6 million in 2017 from $339.4 million in 2016, even though coal sales and produc- tion rose to more than 37.8 million tons. For 2018, Alliance is estimating production at 39 million to 40 million tons, with sales a bit higher at 39.5 million tons to 40.5 million tons. Part of that increase is expected to come from Gibson North, which has been idled since the fourth quarter of 2015. Located about a mile from Alliance's active Gibson South deep mine near Princeton in Gibson County, Gibson North's lower-sulfur coal is the "primary driver" for bringing the mine back, according to Craft. Gibson South, whose coal typically is higher in sulfur con- tent, is "pretty much at full capacity," he noted. Alliance also expects to benefit in 2018 from a full year of op- eration at its Hamilton steam coal longwall mine near McLeans- boro in Hamilton County, Illinois. The company's Tunnel Ridge longwall mine in West Virginia and River View continuous miner operation in Union County, Kentucky, both have some excess ca- pacity, making them potential candidates for expansion. Continued on p. 7...