Anchorage (Platts)--27Dec2012/348 pm EST/2048 GMT

Alaska coal exports will dip in 2012, an official with Alaska's only coal producing company said Thursday.

Shipments to export markets by Usibelli Mine Inc., which operates a surface mine at Healy, in Interior Alaska, will total about 877,000 tons for the year. That compares with 1.3 million tons in 2011, said Keith Walters, Usibelli's vice president for planning. Slower coal demand and more competition in Pacific coal markets accounted for the change, Walters said in an interview.

Coal exported by Usibelli through the port of Seward, in south Alaska, went to Chile, South Korea and Taiwan in 2012, Walters said.

Coal is shipped by rail from Usbelli's mine at Healy about 350 miles to Seward's port.

Sub-bituminous coal mined at Healy is very low in sulfur and is used as a blending coal to help power plants meet air quality standards for sulfur dioxide emissions. Power plants in Chile and South Korea have purchased Alaska coal for several years, Walters said.

Usibelli also supplies about 900,000 tons/year of coal to six power plants in Interior Alaska: three plants on military installations, one at the University of Alaska Fairbanks, one operated by the regional electric utility, Golden Valley Electric Association, and one privately-owned plant.

OTHER PROJECTS IN DEVELOPMENT STAGE

Alaska has large coal resources and two other new coal mines are in advanced stages of development, said Dan Graham, president of the Alaska Coal Association.

One is a planned surface coal mine on the west side of Cook Inlet, on deposit of about 300 million tons of sub-bituminous coal owned by PacRim Coal, which is owned by the Bass-Hunt group. The coal is similar to that produced by Usibelli, including a very low sulfur content.

PacRim Coal is in an advanced stage of development planning and is working on permits, Graham said. A decision on whether to construct the mine expected in 2014, he said.

Chuitna coal would be sold in export markets from a loading terminal to be built in upper Cook Inlet.

A second, smaller project is a planned bituminous coal mine at Wishbone Hill in the Matanuska-Susitna Borough north of Anchorage.

Usibelli owns coal leases at Wishbone Hill and is working to develop a small surface mine. About 14 million tons of mineable reserves have been identified so far at Wishbone Hill, Graham said.

Usibelli has said the coal would be exported to customers in Japan.

--Tim Bradner, newsdesk@platts.com --Edited by Robert DiNardo, robert_dinardo@platts.com