Louisville, Kentucky (Platts)--6Dec2012/612 pm EST/2312 GMT
Knight Hawk Coal President Steve Carter said Thursday the southern Illinois high-sulfur steam coal producer is exploring possible shipment options if the lower Mississippi River, between St. Louis and Cairo, Illinois, is closed to barge traffic because of low water levels. The company relies chiefly on Ingram Barge Company and AEP River Operations to ship its coal on the Mississippi. "We're getting service, but they're concerned" over falling river depths, Carter said in an interview. "The barge companies are scrambling to get equipment and get it up here. They've got a shortage of equipment and bottlenecks." Knight Hawk operates the Lone Eagle Dock south of Chester, Illinois, on the Mississippi River. "It's gotten to the point where when we get barges in, we're trying to get them loaded as quick as we can," he said. "We don't have stockpiling capacity at the barge facility, which makes it difficult for us. We're in a little unique position." Carter said that, for now, switching to rail probably is not Knight Hawk's best alternative. But if the Mississippi's transportation woes continue or worsen, "it might be a possibility. Also finding different locations on the Mississippi and the Ohio River where we could go to. We've got some different possibilities." Whatever the company does, however, "obviously adds to our costs and at a certain point it's not economical to do it," Carter noted. He said Knight Hawk is trying to avoid laying off miners or the 140 or so truckers it uses to haul coal. "Production is going normally," he said. "We basically cut out any unscheduled overtime and discretionary spending. Beyond that, we haven't made any changes." Knight Hawk expects to sell 4.5 million short tons of coal this year and is sold out for 2013, when production is expected to increase by an additional 200,000 st. St. Louis-based Arch Coal owns a minority interest in Knight Hawk.--Bob Matyi, newsdesk@platts.com --Edited by Robert DiNardo, robert_dinardo@platts.com