Storm halts production, shipments at US Midwest coal mines

Louisville, Kentucky (Platts)--6Jan2014/529 pm EST/2229 GMT


The latest batch of frigid air to descend on parts of the US Midwest wreaked havoc on coal production and transportation Monday, idling some mines while preventing others from shipping coal by truck.

Vectren, an Evansville, Indiana-based electric and natural gas utility that also owns coal mines, idled its Oaktown Nos. 1 and 2 underground mines in Knox County, Indiana, as well as its Prosperity deep mine in neighboring Pike County because of the extreme cold, company spokeswoman Chase Kelley said.

The Oaktown and Prosperity mines were shut on the day shift, but were expected to resume production on the evening shift Monday, she said. At this time, Vectren has no plans to idle any of the mines on Tuesday.

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All three mines are continuous miner operations. Together, they are expected to produce about 5 million st of high-sulfur steam coal in 2014. Some of the coal is bought by Vectren's electric utility unit, with the remainder sold to other customers.

Also in southern Indiana, surface mines owned and operated by privately run Solar Sources essentially were shut Monday, according to Felson Bowman, who started the Indianapolis-based company more than three decades ago.

"There's no transportation," Bowman said in an interview. The Indianapolis area was hit with about 11 inches of snow on Sunday, and then the so-called "polar vortex" arrived with its bone-chilling temperatures.

"We've got some people working at the mines. (But) we're not shipping and we're not working that much," he added.

Although Bowman said local mine officials are allowed by Solar to decide whether to produce and ship coal, "We're going to have at least another day of this," so Tuesday could be a carbon copy of Monday, he said.

"You can't get coal trucks on the road. For us, it's wait until the highways get safe," he added.

Peabody Energy said in a statement that all of its operations in the Midwest were "functional" on Monday. That included the large Bear Run surface mine in Sullivan County, which still was producing coal.

Bear Run, the largest surface mine east of the Mississippi River, produces about 8 million st of steam coal annually. Peabody also operates mines in southern Illinois.

Though it is rare when cold weather idles underground mines, it is not unprecedented. When wind chill temperatures reach 30 or 40 degrees below zero Fahrenheit, Don McCorkle, director of the Indiana Bureau of Mines said, it could be 70 degrees below zero in an underground mine near where above-ground air is pumped into the mine.

For Vectren, the cold start to 2014 continues a trend seen in December. The utility advised its customers that it experienced a 30% increase in heating degree days last month compared with December 2012, Kelley said.

--Bob Matyi, newsdesk@platts.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@platts.com

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