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NEWS-THIS MONTH IN COAL Alliance Reports Record Production Two underground mines—one new, the other newly acquired—helped drive Alliance Resource Partners to record coal production and sales in the third quarter, and the company's president and CEO, Joe Craft, is forecasting coal market improvement for the U.S. in the second half of 2013. Output was up by almost 500,000 tons in the third quarter at the new Tunnel Ridge longwall mine in Pennsylvania, while Onton No. 9, in western Kentucky, also showed gains, Craft said in a conference call. For the quarter, Alliance produced 9 million tons and sold more than 8.9 mil- lion tons at its mines in the Illinois Basin, Northern Appalachia and Central Appalachia, representing increases of 17.7% and 7%, respectively, over the third quarter of 2011. Craft said Alliance expects to produce 34.4 million to 34.9 million tons in 2012. The earnings picture could have been even brighter, however, if the Pontiki underground mine in eastern Kentucky had not been idled on August 29. The company closed Pontiki after the federal Mine Safety and Health Administration cited Alliance for the failure of a beltline between two coal stacking tubes. The prolonged shutdown—Pontiki still was not back in operation by the end of October—cost the company an estimated $24.1 million in losses and charges in the latest quarter. Craft said repairs at Pontiki were expected to begin "shortly" and be com- pleted by the end of the year, with the goal of restarting the mine. He cautioned that the market outlook for Pontiki beyond 2013 "is uncertain and there are significant risks about long-term viability of the mine." There are no such worries about Tunnel Ridge, Alliance's newest major steam coal producer. The mine will con- tinue to ramp up to 6.2 million tons in 2013 and 6.5 million to 6.8 million tons in 2014. Craft predicted the coal burn will improve in 2013, "assuming continued strength in gas prices and normal weath- er patterns." The timing of the improve- ments, he added, "will depend on the strength of economic activity both domestically and abroad." 24 E&MJ; • NOVEMBER 2012 Rothschild Resigns from Bumi Board Mining and energy financier Nathaniel Rothschild, one of the founders of Bumi plc, which owns 29% of Bumi Re- sources, resigned from the company's board, saying he had lost confidence in the chairman and the board. Bumi Resources is Indonesia's largest coal pro- ducer. Bumi plc has suffered several set- backs in the last year, which has led to an investigation into alleged irregularities. Rothschild's move was spurred by a proposal from the Bakrie family, who offered $1.2 billion for Bumi's Indone- sian coal assets. Rothschild explained it would be a disgrace to proceed with, or even to entertain, the proposal by the Bakries before the investigation is com- pleted. He questioned the board's loyalty to minority shareholders. In 2011, Bumi Resources mined 65.9 million metric tons. Its primary sub- sidiaries are Kaltim Prima Coal (KPC) and Arutmin, which operate through seven primary mines: the Sangatta and Bengalon mines are operated by KPC and the Senakin, Satui, Mulia, Asam Asam and Batulicin mines are operated by Arutmin. Palmer: Swan and Gillard Killing Mining Investment Mining executive Professor Clive Palmer has slammed Prime Minister Julia Gillard and Treasurer Wayne Swan for imposing a mining tax that has failed to raise rev- enue and only managed to kill invest- ment in Australia's resources sector. Professor Palmer said the Minerals Resource Rent Tax (MRRT) has so far in 2012-13 not raised a cent highlighted the damage the government has caused to the nation's economy for zero gain. "The MRRT has killed investment in Australian mining and it has also destroyed Australia's role in mining exploration for future generations," he said. "Nobody is to blame other than Wayne Swan and Julia Gillard. They have stuck their heads in the sand while the people of this country suffer because of an incompetent tax that at the end of the day raises no money." Professor Palmer said the future of Australia's export trade, as well as the future of many Australian families, would be in jeopardy while the MRRT remains. "The MRRT highlights how this govern- ment and the treasury are out of touch," he said. Bumi Resources mined 65.9 million mt of coal in 2011. (Photo courtesy of Bumi plc) www.e-mj.com