Home > Chemical News

Chemical News

Illinois coal production down in 2016, but may be trending upward

http://www.chemnet.com   Jan 12,2017 Platts
Illinois apparently produced around 44 million short tons of thermal coal in 2016, down from 56 million st the year before, but certain factors are trending upward for 2017, a coal industry official said Wednesday.

Although final data is not yet in, Illinois turned out less coal last year for several reasons including a soft market, a cutback at Murray Energy's Galatia underground mining complex in Saline County, the continued idling of Foresight Energy's Deer Run longwall mine in Montgomery County and the closing last April of Vigo Coal's Friendsville surface mine in Wabash County, Phil Gonet, president of the Illinois Coal Association, said in an interview.

The state produced 11.2 million st, 11.1 million st and 10.1 million st, respectively, during the first three quarters of 2016, according to Gonet. But there are indications the tide may be turning more positive for a state that posted steady production gains in recent years, reaching 58 million st in 2014 only to drop off the past two years.

Gonet cited several factors that may allow Illinois coal output to at least remain stable this year or even climb somewhat depending on how they play out over the next 11 months.

Alliance Resource Partners' Hamilton No. 1 longwall mine near McLeansboro in Hamilton County is "ramping up more, I know that as a fact," said Gonet, who toured the mine in December.

The mine, formerly known as White Oak No. 1 before it was acquired by Alliance from White Oak Resources in 2015, produced 3 million st in 2016, according to the US Mine Safety and Health Administration. While that total was down from 5.8 million st in 2015, Hamilton's Q4 2016 output of nearly 1.3 million st was roughly double that of any previous quarter last year. Hamilton 1 has the capacity to produce more than 6 million st annually.

Friendsville recently resumed production after Vigo was purchased last year by US coal industry veteran Steven Chancellor's White Stallion Energy and landing a coal supply contract with Duke Energy Indiana's nearby 3,145-MW Gibson Generating Station near Princeton, Indiana.

The mine produced about 1 million st a year under Vigo, but Chancellor told Platts in an interview he hopes to increase its tonnage.

Then, there is Hallador Energy's Sunrise Coal subsidiary. Sunrise has been engaged in permitting activity for more than a year with Illinois regulators for its proposed Bulldog underground mine in Vermilion County.

Although it is unclear how hard Hallador/Sunrise are pushing for a final permit from the Illinois Office of Mines and Minerals because of market conditions, the state permit presumably will be issued sometime this year.

Bulldog is billed as an approximately 3 million st/year mine.

No major mine closings or cutbacks are expected in Illinois in 2017. That would be a relief to an industry that saw Foresight keep Deer Run idle in 2016 because of a stubborn underground fire or hotspot that has bedeviled the mine since March 26, 2015, and Ohio-based Murray finally closed the New Era part of its two-mine Galatia complex. The New Future mine continues in operation under the auspices of Murray's American Coal subsidiary.

Gonet said Illinois coal is "well poised for growth because our extraction costs are real low and our operators have some of the most productive mines in the country in terms of man-hours produced."
 Print  |    add to Favorites  |    Close