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NEWS-THIS MONTH IN COAL Vale Declares Force Majeure in Mozambique Walter Energy's emphasis on safety continues to show results as the majority of locations are achieving lower total reportable injury rates. On a consolidated basis, Walter's total reportable injury rate decreased by 26% in 2012 as compared with 2011. CPE Announces Export Agreement with SSA Marine Heavy rains prevented coal trains from reaching the Port of Beira (above). Vale declared force majeure on Mozambique coal export shipments in Tete province after heavy rains hampered transport operations, according to a securities filing. In a press release, Brazilian company officials further cited "operational difficulties" since early February preventing coal from its Moatize mine reaching Beira Port via the Sena rail line. In all, the company has reported that Zambezi River flooding thwarted the delivery of 250,000 metric tons of coking coal. Mozambican port and rail company CFM "is taking all necessary measures to re-establish rail traffic, and the situation should be normalized by the end of the month," added the company. Vale hopes to be independent of the Sena line through a new railway across southern Malawi connecting with Mozambique's existing northern line; this will enable access to the Port of Nacala. Walter Energy Makes Progress In its fourth quarter earnings report, U.S.based Walter Energy, the world's largest publicly-traded "pure-play" met coal producer announced results that reflect cost control initiatives, aggressive production management and disciplined capital spending, in light of significantly lower global pricing levels. Revenues were $479 million for the fourth quarter of 2012, down from $703 million in the fourth quarter of 2011 primarily due to reduced demand and pricing for met coal. The realized price of met coal declined 39% compared with the fourth 26 E&MJ; • MARCH 2013 quarter of 2011. Walter Energy reported a net loss for the quarter of $71 million. For the year, the company recorded revenues of $2.4 billion and a net loss of $1.1 billion. During 2012, Walter Energy achieved record metallurgical coal production of 11.7 million mt and improved its cash cost per ton for met coal by 6%. "Walter Energy made solid operational progress during 2012, in the face of challenging market conditions. We safely increased our production of met coal, strengthened our senior management team and put in place a highly competitive operating platform that reduced our cost of production," said Walter Scheller, CEO, Walter Energy. "In the fourth quarter, we responded to the lower pricing and demand environment by executing the strategy announced last quarter to reconfigure our Canadian operations in order to lower production and reduce costs." In 2012, Walter Energy sold 10.4 million mt of met coal, up 19% from 8.7 million mt in 2011. Met coal prices averaged $149/mt in the fourth quarter, a decrease of 22% from the average of $191/mt in the third quarter of 2012, and a 39% decrease compared with the $242/mt of the fourth quarter 2011. The consolidated cash cost of sales for met coal was $135/mt in the fourth quarter of 2012, as compared with $132/mt in the third quarter of 2012 and $139/mt in the fourth quarter of 2011. In the U.S. operations, the cash cost of sales for met coal was $118/mt in the fourth quarter of 2012. In Canada, the cash cost of sales for met coal was $161/mt in the fourth quarter of 2012. Cloud Peak Energy (CPE) recently reached an agreement with SSA Marine to export up to 16 million tons of coal annually through the Washington state dry bulk cargo Gateway Pacific Terminal. The Cherry Point Port would accommodate cape-size vessels and export up to 48 million t/y. CPE's agreement is a share option based on terminal capacity; after permitting, construction completion is expected in two years while operation is slated for 2018. Methane Ignition Kills 16 Russian Miners The second methane explosion in a Russian coal mine in three years has killed 16 men and left five others injured in the remote Vorkutinskaya mine far north of the Arctic Circle. A total of 259 miners were underground and 23 in the section when the explosion erupted, emergency ministry officials reported. Owned by steel-making giant Severstal and located in the coking coal-heavy region of Vorkuta, the mine has operated since 1973 with an annual output of 1.8 million mt with reserves estimated at 40 million mt. Mitsubishi, BHP Gear Up for Sale of Australian Coal Mine Mitsubishi Corp. and BHP Billiton have begun preparations to sell a portion of the metallurgical coal mining operations they jointly own in Australia, The Nikkei reported. The Gregory Crinum complex has been producing coking coal since 1979 via open-cut and underground mining. It had an output of roughly 3.7 million mt in 2011, accounting for nearly 10% of all of BHP Billiton Mitsubishi Alliance's production. The 50:50 joint venture last year suspended operations at two of its seven already developed coal mines in the state of Queensland. This was due to a deteriorating business environment stemming from falling coal prices, the rising Australian dollar and labor costs. www.e-mj.com