Coal Age

APR 2018

Coal Age Magazine - For more than 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.

Issue link:

Contents of this Issue


Page 13 of 51

12 April 2018 news continued more than 1.6 million tons of met coal last year, with met coal sales in the fourth quarter totaling 341,578 tons, an increase of 42% over the previous year. Corsa sold three steam coal operations in Central App to a group led by the company's current management, including pres- ident Hunter Hobson. The transaction included the Cooper Ridge underground mine and Valley Creek and Buffalo surface opera- tions in Tennessee. Dethlefsen said the move "enables our team to focus its time and resources exclusively on our metallurgical growth initiatives and avoids future environmental liabilities and end-of-mine clo- sure costs in Tennessee." Corsa laid out milestones including expanding its sales and trading platform and increasing utilization of its coal preparation plants in its Northern Appalachian division more than a year ago. "We accomplished all of these objectives in 2017," Dethlefsen said, as overall met coal sales rose by 141% last year. Dethlefsen said, however, that Corsa had multiple shipments delayed in the fourth quarter of 2017 because of weather disrup- tions to the export logistics chain, which affected overall met coal sales volumes and profitability. "We are optimistic that these issues will get resolved in the near term," he added. "Our outlook for the future remains bullish." He noted that the global steel and coke markets are "very healthy," creating stronger demand for Corsa's product. "Domes- tically, steel prices are soaring, which has already stimulated in- cremental steel production and incremental demand for metal- lurgical coal. Supply for metallurgical coal remains tight globally, particularly for the premium qualities." Corsa said its NAPP division's proximity to more than 50% of domestic coke production capacity and short rail distance and multiple options to access the Maryland and Virginia export ter- minals solidifies the company's ability to serve both domestic and international customers. Corsa posted net and comprehensive income of $62.2 mil- lion, or 56 cents/share, in the fourth quarter, compared with a net and comprehensive loss of $10.7 million, or 13 cents/share, in the year-ago quarter. For all of 2017, the company reported net and comprehensive income of $83.7 million, or 72 cents/share, versus a net and comprehensive loss of $34.1 million, or 44 cents/ share, in 2016. Paringa Making Progress on New Poplar Grove Mine Paringa Resources is making significant progress in constructing its new Poplar Grove underground steam coal mine in western Kentucky, with the room-and-pillar operations on track to begin supplying its "cornerstone" contract with Kentucky's largest elec- tric utilities, Louisville Gas & Electric and Kentucky Utilities, later this year. The Australian company said in late March that surface ex- cavation and development work now is substantially complete at the McLean County location near the navigable Green River. "Construction on the Poplar Grove mine continues to prog- ress well, and our team and contractors have performed extreme- ly well to minimize delays and costs during the recent flooding," said Grant Quasha, the company's managing director and CEO. Heavy rains in late winter caused major flooding in parts of the region. Indeed, Paringa said flooding around Poplar Grove was the worst in more than 20 years. Construction activities recently resumed and are back at full capacity after the company got the greenlight from regulators. Excavation of the mine slope has commenced following com- pletion of the final engineering and design of the slope roof sup- port by Keystone Mining Services LLC, an affiliate of Jennmar, a global supplier of roof support for the mining industry. Paringa has issued purchase orders for underground pro- duction equipment to Komatsu Mining, J.H. Fletcher and other equipment suppliers. Poplar Grove is the first greenfield steam coal mine to be developed during the 16-month-old President Donald Trump administration. Paringa said 2018 and 2019 production at Poplar Grove is al- most fully committed. That includes the LG&E/KU contract un- der which Paringa is required to supply 4.75 million tons of coal to the PPL Corp. subsidiaries over five years. As a result, future coal sales agreements are focused on deliv- ery from 2020 onward, and Paringa is optimistic that improving market conditions will provide a platform for improved pricing. The company cited several examples. Murray Energy Corp.'s acquisition of St. Louis-based Arm- strong Energy and its western Kentucky-based Armstrong Coal Co. subsidiary earlier this year further consolidates re- gional coal production capacity and enhances Paringa's value to utilities as one of the last remaining independent sources of high-quality Illinois Basin coal outside of major producers, Paringa said. Paringa said it intends to become a valued supplier to local utilities and is encouraged by the "excellent engagement," includ- ing site visits, from a wide range of local utilities. Several regional utility coal buyers say they prefer to see the coal supply pool expand, not contract, as it boosts competition and competitive pricing. The Trump administration's recent decision to impose tariffs of 25% and 10% on imported steel and aluminum, respectively, with China the primary target, is regarded as a positive move by Paringa. Paringa said the tariffs could drive upward of 3,000 to 4,000 megawatts of around-the-clock electricity demand, potentially creating a market for additional coal sales. In western Kentucky, Century Aluminum is in the process of restarting three idled aluminum-making potlines at its Hawes- ville aluminum smelter in Hancock County. Smelters are heavy users of 24/7 electricity. Across the Ohio River, Alcoa Corp. is re- starting two idled potlines at its Warrick Operations near Yankee- town, Indiana. In neighboring southeastern Missouri, meanwhile, Mag- nitude 7 Metals has announced plans to partially restart the former Noranda Aluinum smelter. And, US Steel has confirmed plans to restart the Granite City, Illinois, blast furnace. AK Steel is rumored to be interested in restarting its operations at Ashland, Kentucky. According to Paringa, Poplar Grove eventually could produce at the rate of approximately 2.8 million tons annually. The com-

Articles in this issue

Links on this page

Archives of this issue

view archives of Coal Age - APR 2018