Coal Age

JUN 2018

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Page 8 of 51

June 2018 7 news continued w o r l d n e w s BMA to Sell Gregory Crinum Mine in Australia BHP Billiton Mitsubishi Alliance (BMA) joint venture partners BHP and Mitsubishi Development Pty Ltd. have entered into an agreement to sell the Gregory Crinum mine in central Queensland to Sojitz Corp. for A$100 million. In addition to the sale of the mine to Sojitz, BMA will be provid- ing appropriate funding for rehabilitation of existing areas of distur- bance at the site, with all rehabilitation liabilities transferred to Sojitz. Gregory Crinum is a hard-coking coal mine located 60 kilometers (km) northeast of Emerald in the Bowen Basin. The site comprises the Crinum underground mine, Gregory open-cut mine, undeveloped coal re- sources and on-site infrastructure, including a coal handling and prepa- ration plant, maintenance workshops, and administration facilities. Gregory Crinum mine's capacity was 6 million metric tons per year (mt/y) of hard-coking coal when production ceased and it was placed into care and maintenance in January 2016. BMA said it made the decision to sell the mine after a detailed review that concluded there is potential for another party to realize greater value at the mine. "This is a great outcome for the parties to the transaction and for the region," BMA Asset President Rag Udd said. "This will provide further employment in Emerald, and additional royalties and taxes to the people of Queensland." Completion of the sale is subject to regulatory approvals, which could take several months. During the approval period, BMA and Sojitz will work together to facilitate a smooth transition. Ukraine Imports More Coal From January to May, Ukraine increased coal imports by 42.9% or 2.8 million metric tons (mt) compared to the same period in 2017, to 9.2 million mt. According to government records, the coal imports cost $1.2 billion, which is 20.6% more than in January to May 2017 ($1 billion). During that timeframe, according to the Kyiv Post, Ukraine im- ported coal from Russia, $827 million (66.2% of imports); the United States, $344 million (27.51%); Canada for $48.4 million (3.87%); and other countries for $30.3 million (2.42%). For all of 2018, Ukraine expects an increase of import of steam coal by 11.3% compared to 2017, to 5.7 million mt. Meanwhile, the coal operations in the Donbass are exporting coal to Russia. UNIAN quoted Ukrainian Member of Parliament Dmytro Tym- chuk as saying Russia has begun to "massively" transport coal from the self-proclaimed "Luhansk and Donetsk People's Republics (LPR/DPR)" in the occupied areas of eastern Ukraine. "Figures show that coal supplies to [Russia's] Rostov region in the first quarter of this year [Q1 2018] ac- counted for almost 50% of coal supplies in 2017," Tymchuk said. Nearly 1.6 million metric tons (mt) of coal worth more than $63 million ($54.7/mt) was transported from the occupied areas to Ros- tov region in 2017, while more than 747,000 mt of coal worth $25.8 million ($34.54/mt) was delivered to Russia in the first quarter of 2018 alone. In the first two months of 2018, about 27% of total coal supplies for 2017 (77.5% of those in 2016) was transported from the "LPR/DPR" to Rostov region. Coal shipments to Russia in March alone soared by 46.8% from the total figure for 2017 and more than 132% from the same period in 2016. CIL Targets Significant Production Increase Coal India Ltd. (CIL) Chairman and Managing Director Anil Kumar Jha said the company has set a production target of 652 million met- ric tons (mt) and a dispatch target of 681 million mt in the current financial year. This translates to a 16% increase when compared to fiscal year 2018, when the company dispatched 580 million mt and produced 567 million mt of coal. Continued on p. 8... top 10 coal-producing states Among the coal plants previously retired were Muskingham River in Ohio, Big Sandy in Kentucky, Kammer and Kanawha River in West Virginia, and Clinch River and Glen Lyn in Virginia. In the past couple of years, the pace of AEP's coal plant retire- ments has slowed. Coal still accounts for about 47% of AEP's total generating capacity of about 33,000 megawatts. AEP serves about 5.4 million customers in 11 states. Foresight Energy Expects Strong Export Steam Coal for 2018 Foresight Energy said it anticipates selling at least a third of its Illi- nois steam coal production, perhaps more, into the export market in 2018 after such sales accounted for 33% of the 5.24 million tons the St. Louis-based company sold in the first quarter this year. Two primary motivations behind the higher export sales are low natural gas prices domestically and higher sales price realiza- tions from shipping coal overseas as opposed to marketing it in the United States, said Robert D. Moore, Foresight president and CEO. The company reaffirmed projected coal sales volumes of 21.5 million tons to 22.8 million tons this year, with at least 7 million tons destined for export. "We have 6.7 million tons contracted for the export market with the possibility of increasing that to 9 million tons to the ex- port market for the full year," Moore said. Moore said he has seen a "decent amount" of domestic re- quests for proposals for steam coal this year "and a movement up- ward in the price of Illinois Basin coal, a positive move as it relates to folks being more disciplined and recognizing there is a tighten- ing as to the availability of coal for the remainder of this year." The export market, he noted, "has pulled a lot of volume out of the domestic market." Currently, Foresight is seeing prices for its coal in the high $30s to mid-$40s per ton. The company reported average first-quarter coal sales of $45.49/ton, down 3.2% from the prior quarter, but up 5.5% from a year ago. Foresight produced 5.67 million tons in the January-March period from its three longwall mines in Illinois, a 14.4% increase from the 4.96 million tons it turned out in the first quarter of 2017. Potentially aiding production during the balance of 2018 is that Foresight had no planned longwall moves after May. (in Thousand Short Tons) Week Ending (5/26/18) YTD '18 YTD '17 % Change Wyoming 122,605 123,008 -0.3 West Virginia 37,820 37,438 1.0 Illinois 19,890 20,277 -1.9 Pennsylvania 19,651 20,065 -2.1 Kentucky 17,005 18,160 -6.4 Montana 12,910 11,851 8.9 Texas 12,525 13,704 -8.6 Indiana 12,430 12,892 -3.6 North Dakota 10,679 11,124 -4.0 Colorado 6,801 6,366 6.8 U.S. Total 303,012 307,564 -1.5

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