Engineering & Mining Journal

MAR 2019

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NEWS - THIS MONTH IN COAL 18 E&MJ • MARCH 2019 Glencore Will Limit Coal Production The world's largest exporter of thermal coal, Glencore announced it would be capping its yearly coal production in the future to combat climate change. Glencore said it will prioritize its capital investment to grow production of commodities "essential to the energy and mobility transition" and limit its coal production capacity to current levels. In 2018, the company produced 129.4 mil- lion metric tons of coal. "To deliver a strong investment case to our shareholders, we must invest in assets that will be resilient to regulatory, physical and operational risks related to climate change," the company said in a statement. The company announced further steps to transitioning to a low-carbon economy, which included rebalancing its portfolio toward commodities that support low carbon. It expects the intensity of Scope 3 emissions to decrease and starting in 2020 will disclose its long-term projec- tions for reduction in those emissions, as well as mitigation efforts. Glencore added that it was on track to meet its target of reducing greenhouse gas emissions by 5% by 2020. "We are developing new, longer-term targets based on policy and technological develop- ments that support the Paris Goals, and intend to make these public in our Annual Report in 2020," the company said. According to Wood Mackenzie's research director, Prakash Shar- ma, Glencore had an estimated market share of nearly 25% in the seaborne trade last year and has a dominant position in thermal coal segment. "In that regard, cap- ping coal production is significant because prices could remain high amid tighter supplies," he added. "Glencore is chasing value over volume." He added that companies who were holding on to high-energy thermal coal assets will stand to gain and realize high- er prices. "Glencore sits comfortably in that space due to its competitive cost position," he said. Foresight Delivers Record Steam Coal Sales in 2018 Foresight Energy capitalized on strong ex- port markets and improved domestic spot opportunities to post record steam coal sales of 23.4 million tons in 2018, gen- erating total revenue of $1.1 billion and adjusted EBITDA of more than $313 mil- lion, the Murray Energy subsidiary said on February 27. This year isn't looking too shabby ei - ther as the St. Louis-based company pre- pares to reopen its long-idled Deer Run, or Hillsboro, underground steam-coal mine in Montgomery County, Illinois. The mine has not produced coal on a regular basis since March 26, 2015, when it was shut down by the federal Mine Safety and Health Administration because of elevat- ed carbon monoxide readings resulting from a combustion event. Robert D. Moore, Foresight presi- dent and CEO, said Foresight also en- joyed a good fourth quarter of 2018 by selling more than 6.1 million tons and generating revenue of approximately $299 million, resulting in EBITDA of nearly $87 million. "These results reflect continued im- provement in our year-over-year and se- quential quarter-sales volumes, sales re- alization per ton sold and sales revenue," he said. "Our fourth-quarter results were the capstone of another successful year for Foresight." Foresight produced more than 6 million tons of coal in the October- December period, up from approximately 5 million tons a year earlier. Coal pro- duction for calendar-year 2018 amount- ed to 23.3 million tons, versus 21.2 million tons in 2017, for an increase of nearly 10%. Moore said the production levels un- derscore the efficiency and productiv- ity of Foresight's underground mines, "which places our mines among the most efficient and productive underground mines in the country, as measured on a clean-ton-per-underground man-hour work basis." In 2018, Foresight's Williamson and Sugar Camp deep mining complexes in southern Illinois ranked as the second and third most-productive mines in the United States, he added, generating 17.4 tons and 16.3 tons per under- ground man-hour work, respectively. On a combined basis, the Foresight mines produced more than 17 tons per un- derground man-hour worked during the fourth quarter of last year, and 15.3 tons per underground man-hour worked for the full year. That compares to the national average for underground mines of 4.7 tons per man-hour worked during the fourth quar- ter and 4.6 for underground man-hour worked for all of 2018. Foresight's record sales volumes included exports of 2.7 million tons in the fourth quarter and approximately 9 million tons into the export market for full-year 2018, representing 43% and 38% of the company's total sales vol- umes, respectively. A coal train from Glencore's Prodeco operation in Colombia heads to port.

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