Engineering & Mining Journal

MAR 2016

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24 E&MJ; • MARCH 2016 www.e-mj.com NEWS-THIS MONTH IN COAL Rio Tinto has completed the sale of its 40% interest in the Bengalla coal joint venture (JV) in Australia to New Hope Corp. Ltd. for $616.7 million. Rio Tinto has now announced or completed $4.7 billion of divestments since January 2013. A change to the ownership structure of Coal & Allied completed in early February helped enable this transaction. As 100% owner of Coal & Allied, Rio Tinto receives all consideration associated with the sale of its interest in the Bengalla JV. Rio Tinto holds a 67.6% interest with management rights in the Hunter Valley Operations mine. It also holds interests of 80% and 55.6%, respec- tively, with management rights, in the inte- grated Mount Thorley and Warkworth opera- tions. The company currently holds 100% interest in the Mount Pleasant project. On January 27, Rio Tinto announced it reached a binding agreement for the sale of Mount Pleasant to MACH Energy Australia for $224 million plus royalties. The sale is expected to close in the second half of 2016. Mitsubishi Development has moved from holding a 20% stake in Coal & Allied to holding a direct 32.4% stake in the Hunter Valley Operations mine. CONSOL Energy Sells Buchanan Mine On February 29, CONSOL Energy entered into an agreement to sell its Buchanan mine in southwestern Virginia and other metallurgical coal reserves to Coronado IV LLC for $420 million, including $398 mil- lion cash payable at the closing. "This is another significant event in the execution of CONSOL Energy's strategy, as well as a meaningful step in continuing to strengthen our balance sheet," said Nicholas J. DeIuliis, president and chief executive officer. "The Buchanan mine fits into Coronado's portfolio as a pure play metallurgical coal producer, and, in the end, this transaction bolsters the strategic position of both companies." Also included in the transaction are CONSOL Energy's idled Amonate mine in southern West Virginia and southwestern Virginia, its greenfield Russell County coal reserves in southwestern Virginia and its greenfield Pangburn-Shaner-Fallowfield coal reserves in southwestern Pennsylvania. The transaction includes approximately 400 million tons of proved coal reserves, which includes approximately 88 million tons associated with the Buchanan mine. The transaction does not include any gas rights, and CONSOL will retain the right to extract and sell gas at the mines and other properties. CONSOL expects to use the proceeds to pay down debt. The transaction is expect- ed to close in the first quarter of 2016. 36 People Killed Following Explosions at Russian Mine On February 28 during efforts to save miners who were trapped following a underground rock burst at a Russian coal mine, a third explosion occurred, killing five rescue work- ers and one miner. Due to the degree of destruction and the level of methane gas con- centration in the mine, the 26 trapped min- ers have also been presumed dead, according to officials with the Emergency Commission. Two explosions that caused a tunnel collapse at the Severnaya mine in the town of Vorkuta in the Komi Republic, Russia, on February 25 left four miners dead and more than 100 trapped underground. The methane-induced blasts also triggered rockslides. In the first few hours following the accident, 80 miners were evacuated. Since that time, more than 500 rescuers worked around the clock to save the remaining miners with no luck. "The directors and management of Severstal and Vorkutaugol express their deepest condolences and will provide sup- port to the families, colleagues and friends of those affected by this tragic incident," officials with Vorkutaugol said. Mining operations at Severnaya remain suspended. The Emergency Commission determined that the initial blast was caused by geological reasons rather than an error or equipment failure. Employees at the mine have been placed on paid leave. An assessment for the continuation of min- ing operations at Severnaya is under way, but experts said if restoration is successful, the mine can return to full-scale operations within six to 12 months. US Supreme Court Puts Clean Power Plan on Hold In a 5-4 decision, the U.S. Supreme Court has put a temporary halt on the Environ- mental Protection Agency's (EPA) Clean Power Plan (CPP), citing ongoing litigation against the carbon emissions reduction scheme by the coal industry and other par- ties. The stay stops all enforcement until the suits are resolved, including one by a coalition of 27 U.S. states and several pro- coal groups. The one-page order also comes after a federal appeals court refused to put a hold on the plan late last month at the request of that same group. Oral appellate arguments are slated to commence on June 2; several larger media outlets have indicated that there is a possi- Rio Tinto Completes the Sale of its Interest in Bengalla JV in Australia An excavator loads a haul truck at the Hunter Valley Operations mine.

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