This Month In Coal - November 2017

MEC, Bowie Partner to Create Canyon Consolidated Resources

Murray Energy Corp. (MEC), Bowie Resource Partners, Javelin Global Commodities, and Grupo CLISA have agreed to form a strategic partnership called Canyon Consolidated Resources (CCR), which will produce approximately 13 million tons per year (t/y) and own 214.8 million tons of coal reserves.

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Gardner is Nominated to Lead OSM

U.S. President Donald Trump nominated Steven Gardner to be the director of the Office of Surface Mining, Reclamation and Enforcement (OSM) at the U.S. Department of the Interior. U.S. Secretary of the Interior Ryan Zinke hailed Gardner’s nomination.

“When confirmed, Steve will be an unbelievable asset to coal country and the entire team at the Department of the Interior,” said Secretary Zinke. “Steve is highly regarded in the mining industry for his extensive experience and insight.”

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SEC Files Complaint Against Rio Tinto Over RTCM

The U.S. Securities and Exchange Commission (SEC) filed a complaint in relation to Rio Tinto’s disclosures and timing of the impairment of Rio Tinto Coal Mozambique (RTCM). The impairment was reflected in Rio Tinto’s 2012 year-end accounts. Rio Tinto said it intends to defend itself against these allegations.

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This Month In Coal - October 2017

Whitehaven Posts Impressive Results

Whitehaven Coal, Australia’s leading independent coal company with five operating mines in northwest New South Wales, has reported a net profit after tax of $405.4 million for the fiscal year ending June 30. While costs had increased modestly to $58 per metric ton (mt), the company reported sales of $1.77 billion, up 52%.

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Paringa Breaks Ground on New Poplar Grove Mine

Paringa Resources Ltd., the newest entrant in the Illinois Basin (ILB) steam coal market, began construction in August on its 2.8-million-ton-per-year (t/y) Poplar Grove underground steam coal mine, the first of two deep mines planned by the Australian company for its extensive Buck Creek reserve in western Kentucky.

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This Month In Coal - September 2017

Cloud Peak Hosts EPA Administrator

Environmental Protection Agency (EPA) Administrator Scott Pruitt visited the Cloud Peak Energy’s headquarters in Broomfield, Colorado, last month to discuss the agency’s priorities and steps taken during the first six months of the administration and also to hear how the end of the former President Barack Obama administration’s “war on coal” has positively impacted coal jobs and the outlook for the industry.

Pruitt’s remarks focused on his efforts to return the rule of law to the EPA, to bring “a degree of humility” to governance, and to demonstrate that strong and effective environmental stewardship can be achieved without restricting economic growth or negating America’s energy advantage.

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Contura Withdraws IPO

Contura Energy has withdrawn the initial public offering (IPO) of its shares of common stock due to capital market conditions. The company’s principal selling stockholders unanimously determined that proceeding with the offering under current market conditions would undervalue the company.

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Glencore Acquires Interest in Hunter Valley Operations

Glencore has signed agreements with Yancoal Australia regarding the acquisition of a 49% interest in the Hunter Valley Operations (HVO) coal mine in New South Wales and forming a joint venture (JV) following Yancoal’s acquisition of Coal & Allied (C&A) from Rio Tinto.

Glencore will pay cash consideration of $1.139 billion plus a 27.9% share of $240 million non-contingent royalties over five years and 49% of price contingent royalties payable by Yancoal to Rio Tinto on production from HVO in respect of the C&A acquisition.

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This Month In Coal - August 2017

Alpha to Transfer Idle Assets, Eliminate Self-bonding in West Virginia

Alpha Natural Resources plans to pay Lexington Coal Co. (LCC) to take its idled assets. Included with these properties, which are located in Kentucky, Illinois, Tennessee and West Virginia, are approximately 280 permits, substantial reclamation equipment, ongoing royalty payments associated with these properties and 100 million tons of reserves. While the specific economic terms were not disclosed, LCC will receive approximately $204 million in cash at the time of closing and $112 million in installment payments to assist in the fulfillment of bonding, reclamation, water treatment and other obligations associated with the conveyed properties and permits.

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CONSOL Files Plans to Spin Off Coal Business

In mind-July, CONSOL Energy filed the necessary paperwork with the U.S. Securities and Exchange Commission (SEC) to split the company into two publicly traded companies, a coal company and a natural gas exploration and production (E&P) company. The spin-off would provide current shareholders ownership in two companies, each positioned to capitalize on distinct opportunities for future growth and profitability, the company said.

“Today’s filing represents a significant step toward completing the company’s separation, with both entities being well-capitalized and free cash flow generating,” said Nicholas J. DeIuliis, president and CEO. “This strategic separation will enable both businesses to focus on their inherent strengths and unlock value for their shareholders.”

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India’s Utility NTPC Bets Big on Coal

Contrary to the government’s avowed policy, coal will continue to remain the mainstay of India’s largest power generation company, NTPC Ltd. The company is forging ahead to become the country’s second largest coal miner after Coal India Ltd. with plans for large investments in new coal-fired thermal power plants.
Having made a mark as a coal producer from its captive coal mines in the current fiscal year, NTPC Ltd. aims to achieve coal production of 107 million metric tons per year (mt/y) over the next few years.

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