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6 www.coalage.com May 2018 news continued portunity for value creation through combining our respective operational portfolios," said Crutchfield. "The Contura team is excited to join forces with Alpha's set of highly competitive coal operations and unify some of the best coal miners in the world under one organization." "We believe this transaction makes great strategic sense that benefits our long-term stakeholders," added Stetson. "The com- bined organization will have a stronger balance sheet, greater ca- pabilities and a longer reserve life. More importantly, the merger will align two companies that share a steadfast commitment to safety and Running Right." Contura Energy was formed in July 2016 with an initial acqui- sition of certain coal assets from Alpha Natural Resources, concur- rent with Alpha's emergence from its Chapter 11 reorganization process. Contura and Alpha have since operated independently. "This transaction will leverage the prior transformative work accomplished by both Contura and Alpha management teams to materially improve each entity's operational, financial and risk profiles," said Contura Board Chairman Neale Trangucci. "Achiev- ing such a turnaround in less than 2 years is no small task. Our board is proud of and appreciates the diligent work of employees and management of both organizations, and we are very excited about the future of the new combined company." Post-merger, Contura's assets will consist of coal mines in Central Appalachia, longwall thermal coal mine in Northern Ap- palachia, one of the largest met coal reserves in the U.S., and its 65% ownership interest in the Dominion Terminal Associates coal export facility located in Newport News, Virginia. Foresight Sees Higher Production in Q1 2018 Illinois Basin (ILB) steam coal producer Foresight Energy mined more coal and its coal sales revenue was higher in the first quarter of 2018 than a year ago, even though it decided to permanently close its ill-fated Deer Run longwall mine near Hillsboro in Mont- gomery County, Illinois. The St. Louis-based company produced nearly 5.7 million tons in the January-March period, up 7.6% from the 5.27 million tons produced in the first quarter of 2017. Coal sales dipped slightly in the first quarter to 5.2 million tons from 5.3 million tons a year ago, a modest 0.8% decline. However, coal sales revenue totaled $238.4 million in the latest quarter, up from $227.8 million a year earlier, primarily driven by a $2.30/ton or 5.5% increase in coal sales realizations. Jeremy Harrison, Foresight CFO, told analysts that cash costs per ton sold rose to $23.19 in Q1 from $22.80/ton in the first quar- ter of 2017, mainly due to higher overriding royalty expense in the latest quarter and operational challenges at the company's M-Class longwall mine that is part of the Sugar Camp Energy complex near Akin in Franklin County, Illinois. Transportation costs also were higher in Q1 by $8.7 million to $46.4 million a year ago, largely because of a higher proportion of coal — 1.7 million tons — shipped into the export market during the period. Foresight CEO Rob Moore, who said his company has seen "a decent amount" of coal requests for proposals activity in the last month or so, noted that coal pricing also is moving upward in the high-sulfur ILB. Continued from p. 5... Continued on p. 7... Improvements in the midterm and long-term contract sys- tems will speed up and the signing of direct sales contracts be- tween supply and demand sides is also encouraged, Yuzhi said. The government will monitor the implementation of midterm and long-term contracts by relevant companies, rewarding honest enterprises and punishing dishonest ones. The government will also promote the establishment of a minimum and maximum in- ventory system for coal, support the building of coal storage and transportation facilities, and improve coal storage capacity in so- ciety, especially in power plants. Since 2016, China has launched a series of measures to cut overcapacity of coal production and improve the quality and effi- ciency of coal industry development. About 290 million and 250 million tons of coal overcapacity were cut in 2016 and 2017, re- spectively, surpassing the annual goals for two consecutive years. Proposed Sanctions Impact Kazahk Coal The Economic Times reported that the Bogatyr Komir coal mining joint venture between Kazakhstan's state-run Samruk Energy and Rusal could face risks linked to U.S. sanctions against the Russian aluminum producer's CEO Oleg Derispaska. Bogatyr Komir produces 41 million metric tons (mt) of coal per year, which it sells in Kazakhstan and Russia, mostly to pow- er plants. U.S. sanctions could hamper the venture's equipment upgrade project, Samruk, a unit of sovereign fund Samruk Kazyna, said in a written reply to questions from Reuters, which said "probable sanctions-related risks have been identified, including with regards to Bogatyr Komir, in which Rusal indirectly owns a 50 % stake." Samruk said it had contacted ThyssenKrupp, a supplier of equipment for the venture, and the Eurasian Development Bank, asking them to confirm whether they would continue working with Bogatyr Komir. China Coal Imports Tumble on New Rules The Business Times reported that China's decision to impose fresh restrictions on imports of coal at some ports appears to have caused a sharp fall in inbound shipments of the polluting fuel. The measures, announced on April 16, included banning the unload- ing of imported coal at some ports and tightening customs clear- ances. While it's still too early to discern a definitive trend, China's seaborne coal imports slumped to 3.45 million metric tons (mt) in the week ended April 21, according to vessel-tracking and port data compiled by Thomson Reuters Supply Chain and Commodity Fore- casts. This was down almost 30% on the 4.92-million-mt weekly average that was recorded from Jan 1 to April 15. It's also lower than the weekly average of 4.45 million mt for seaborne imports in 2017. It is possible that there are other factors at play in the slump in seaborne imports, including lower demand in the usually soft- er period between the northern winter and summer peaks. But a decline of the magnitude seen recently suggests that the import restrictions had an immediate and profound impact. It's believed the authorities in Beijing took steps to crimp some imports as part of efforts to boost domestic thermal coal prices and production. Indian Coal Imports Rise After 2 Years of Decline Indian coal imports increased 14% during fiscal year 2017-2018, reversing the declining trends in two consecutive previous fiscal years with portents of higher inward shipment of the dry fuel in