Coal Age

JUN 2018

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Page 9 of 51

8 June 2018 news continued "With the cooperation of ministry of coal, railways and all con- sumers, [CIL] is sure of achieving the target of 652 million mt of production in fi scal year 2018," Jha said. With regards to e-auction of coal, he said it will be maintained at fi scal year 2018's level of 103 million mt, but the excess coal pro- duction will be directed toward the power sector. Power demand has increased exponentially in India and peak demand is expected to reach 171 gigawatts at a time when wind and hydro energy production will be low, according to Indian Power Minister RK Singh. Australian Coal Prices Hit 6-year High Australian thermal coal prices have risen to their highest level since 2012 as hot weather across North Asia spurs buying ahead of the peak-summer demand season. Spot prices for thermal coal from Australia's Newcastle terminal last closed at $115.25 per metric ton (mt), the highest level since February 2012. Thermal coal production has surged by 130% since its record lows below $50/mt in 2016 following a yearslong decline. Prices have been driven up by economic growth, especially in Asia, along with constraints on supply due to earlier mine closures and high hurdles to developing new mines amid concerns about pol- lution and global warming. A heat-wave in North Asia and restocking ahead of the hottest summer months in July and August have led to soaring demand for both residential and industrial cooling, traders said. Weather data in Thomson Reuters Eikon shows that large parts of North Asia, including cities like Beijing and Tokyo have experi- enced unusually warm weather since late May. Supply disruptions from South African miners have also pushed up Newcastle prices, as buyers shifted toward Australia to meet demand. Port Waratah Scraps T4 Project Port Waratah Coal Services have advised the Port of Newcastle that it intends to allow the Terminal 4 Agreement for Lease to lapse when it expires in August 2019. This means that Port Waratah does not in- tend to proceed with the Terminal 4 development, CEO Hennie du Ploy explained. He said Port Waratah has consulted with a full range of industry stakeholders and concluded that the capacity of the existing coal terminals, including potential expansion options, are likely to be suffi cient to cater for future growth in coal exports. Market conditions for Hunter Valley coal are strong, with Newcas- tle exports stable near record levels and prices are once again above $100 per metric ton (mt). At Port Waratah's terminals, 105 million mt were loaded in 2017 and incremental growth is expected this year. "With signifi cant growth capacity available in the existing ter- minals, we do not expect that the conditions to support an investment of the large and long-term nature of Terminal 4 will be in place before the development approval lapses in September 2020," du Plooy said. Coal constitutes the bulk of Newcastle port volumes and will re- main a big part of Newcastle's future. "Coal is a key component of the global energy mix and is forecast to remain so for the foreseeable future, particularly in our core markets in Southeast Asia," du Plooy said. A key strength of the Hunter Valley coal chain is its reliability and effi ciency, which is delivered through industry-led centralized planning and the fl exibility provided by the different terminals. "For this reason, both Carrington and Kooragang terminals are central to our operations," du Plooy said. Continued from p. 7... Moore said Foresight's mines ranked in the top 15 under- ground mines in the U.S. in terms of being productive, producing on average 14 tons per man-hour worked. That has helped the company to reduce its production costs to $23.19/ton, with costs predicted to decrease even more in the latter half of 2018. Foresight's ill-fated Deer Run longwall mine, also known as Hillsboro, in Montgomery County, Illinois, is a different story. The mine essentially had not operated on a continuous basis since March 26, 2015, because of a nagging combustion event before Foresight announced plans earlier this year to permanently close it. Foresight already has collected $15 million in insurance pro- ceeds related to Deer Run, and soon expects to receive another $29 million. The company is in dispute with its insurance carriers, however, over a remaining $59 million it believes it is owed. Some of those recovered funds will be used to pay for leased mining equipment that Foresight was not able to recover from Deer Run. Foresight expected to write off $134 million to $172 million in Deer Run closing costs during the second quarter. The company recorded coal sales revenue of $238.4 million in the fi rst quarter, up from $227.8 million a year earlier. It incurred a fi rst-quarter loss of $21.5 million, versus a loss of $111.1 million a year ago. Coal Helps Lead Port of Mount Vernon to Record Shipment Levels in Q4 Rising steam coal shipments, especially from Alliance Resource Partners' mines in the Illinois Basin, helped drive the Ports of In- diana to record levels in the fi rst quarter of 2018, and the outlook for the remainder of the year is encouraging. Indiana's three ports handled a total of 3.2 million tons of car- go in the January-March period, with the Port of Indiana-Mount Vernon on the Ohio River in southwestern Indiana setting a re- cord for the highest fi rst-quarter volume ever recorded at any of the state's ports. The Mount Vernon port handled 2.2 million tons of cargo during the period, 6% higher than a year ago, following a re- cord-breaking year in 2017 when it passed through more cargo than any port in the 57-year history of Indiana's port system. According to port offi cials, coal shipments helped lead the way in the fi rst quarter with a 16% increase over last year, with a 27% jump in grain shipments and smaller increases in salt, lime- stone and soy products also contributing to the quarterly record. "It's encouraging to see the upward trends continue, espe- cially in coal and agricultural shipments, which make up more than 90% of this port's cargo," said Mount Vernon Port Director Phil Wilzbacher. "The fi rst quarter certainly sets the pace for what we anticipate being another strong year for maritime shipments throughout Indiana." While Tulsa, Oklahoma-based Alliance operates several coal mines in the region, a company offi cial traced most of the in- creased port shipments to the River View underground mine in Union County, Kentucky, and Hamilton County Coal No. 1 long- wall mine in Hamilton County, Illinois. River View is a continuous miner operation. River View produced about 2.4 million tons of coal in the fi rst quarter this year and 8.9 million tons in 2017, according to the

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