Coal Age

DEC 2012

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Page 11 of 75

news continued Continued from pg 7... A large bulk carrier destroyed a section of trestle after crashing into a berth at Westshore Terminals. (Photo courtesy of Global BC) coal. The loss of the berth, which handles ships with a cargo capacity up to 260,000 metric tons (mt), is a significant blow to Westshore, which is North America's largest coal exporting port. Westshore has one remaining berth, which can handle ships with a capacity of 180,000 mt. The bulk carrier Cape Apricot, with a capacity of 180,000 mt, slammed into a trestle, the only link between the berth and the terminal, destroying more than 100 m of it. The ship went right through the causeway, taking a road, the coal-carrying conveyor belt, and electric and water lines with it. The terminal is the main shipping point for metallurgical coal from Teck Resources mines in eastern British Columbia. It is also used by U.S. coal companies. Teck Resources said it would continue to use Westshore's remaining berth, but will be shifting capacity to Neptune Terminals in North Vancouver to maintain export volumes. It's also investigating other options. Bumi Expects to Retain Business in Indonesia London-listed Bumi, which controls a stake in two of Indonesia's major coal producers, expects to retain its grip on assets in the country despite the planned exit of its Indonesian shareholder, The Jakarta Post reported. Nick von Schirnding, Bumi group head of corporate affairs and investor relations, said the company would maintain its interest in creating an "Indonesian coal champion. We'll get through these few bumps on the road in a few weeks. The thing is, if the Bakries swap their shares and exit, we do have local partners here, in particular in the form of Borneo [PT Borneo Lumbung Energi & Metal] and Samin Tan," Von Schirnding said. Bumi Plc is currently 47.8% owned equally by the Bakrie Group and hard-coking coal producer Borneo, which was founded by local tycoon Samin Tan, who currently serves as Bumi Plc's chairman. The Bakrie Group, controlled by the family of the presidential candidate of the Golkar Party, Aburizal Bakrie, recently submitted an offer to Bumi Plc. to exchange its 23.8% stake in Bumi Plc. for shares in the company's subsidiary, Jakarta-listed PT Bumi Resources. The Bakries apparently want to complete the transaction before Christmas. The goal is "technically feasible but very unlikely," Von Schirnding said, pointing out that Bumi plc's board still needed to recommend the proposal and seek approval in an extraordinary meeting while the London Stock Exchange will be closed from December 21. Continued on pg 11... 10 Neither Dawson nor other company officials have elaborated about what caused the longwall relocation to take much longer than anticipated. The mine, which has about 300 employees, also was idled a couple of times in 2011 as a result of roof falls. The company did not say how much coal the mine formerly known as Bull Mountain was projected to produce and ship in 2012, but things were looking good before the production/shipping halt. Signal Peak, located near Roundup in Musselshell County about 30 miles north of Billings, turned out nearly 5 million tons in the first nine months of 2012, almost reaching the 5.1 million tons it produced for all of 2011. Rhino Plans New ILB Operation Rhino Resource Partners is moving ahead with plans to open its first coal mining operation in the high-sulfur Illinois Basin, the new Pennyrile underground mine near the Green River in western Kentucky's McLean County. Rick Boone, senior vice president and CFO of the Lexington, Ky.-based company, talked up the new mine at the RBC Capital Markets master limited partnership conference in Dallas in mid-November. "We have been in negotiations with anchor customers and are far down the road," he said. "We plan to start producing coal in mid-2014 from this operation." Although Rhino has not publicly disclosed tonnage projections for the mine, McLean County officials say the mine could produce as much as 2.2 million tons of high-sulfur steam coal annually for 20 years or more. Boone noted that one of the mine's big advantages "is we have access to the river and will construct a barge unloading facility." The prime location affords Rhino several attractive options. Not only does it provide access to a number of domestic electric utilities that have installed scrubbers to burn highsulfur coal, "eventually it will give us the opportunity to access the Port of New Orleans and the overseas market in the future." Pennyrile marks Rhino's entry into its fourth coal basin in the United States. The company has existing operations in Central Appalachia, Northern Appalachia and in Utah and Colorado. In addition to western Kentucky, Rhino also has considered opening a large underground mine in Christian County, Ill. According to Boone, Rhino has committed coal sales of 3.4 million tons in 2013, and its Hopedale and Castle Valley mines in Ohio and Utah, respectively, are "fully contracted through 2014." Unlike some coal producers, "steam coal customers are continuing to take their coal as contracted" from Rhino, he said. "We have not had a problem in that area. We're underutilizing our assets, so when the market returns we would be able to increase production on a short-term basis." Rhino acquired the undeveloped McLean County property, then known as Delaware, earlier this year from Alpha Natural Resources for an undisclosed amount. Rhino's application for a Section 404 Clean Water Act permit is pending at the Louisville, Ky., district office of the U.S. Army Corps of Engineers. CONSOL Idles Miller Creek Surface Operations CONSOL Energy intends to idle its Miller Creek surface operations near Naugatuck, W.Va., resulting in a layoff impacting December 2012

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