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Sun Energy Group starts shipping coal to Big Rivers again, lifts force majeure

Louisville, Kentucky (Platts)--10 Apr 2018 504 pm EDT/2104 GMT


Sun Energy Group has lifted a flooding-related force majeure declaration and is shipping coal again to Big Rivers Electric power plants in western Kentucky, an official with the southern Indiana coal producer said Tuesday.

Dan Morgan, an accountant for the Huntingburg, Indiana-based company, said Sun will be allowed to make up about 10,000 st in rollover tonnage it was unable to ship during the roughly three-week force majeure declaration, which ended in March.

The rollover tonnage, however, will not be made up until early 2019, he said.

Sun issued the declaration not long after it was awarded a contract to supply as much as 720,000 st over a three-year period -- 2018, 2019 and 2020 -- to the Henderson, Kentucky-based generation and transmission cooperative.

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Flooding on the Ohio River in late February forced Sun to declare force majeure. This week the river is rising again due to rain, although it is not currently forecast to reach February's levels.

Sun's shipments to Big Rivers started in January, with the delivery point the Yellow Banks Terminal on the Ohio River near Owensboro, Kentucky.

The average 11,200 Btu/lb coal is coming from Sun's Hillsmeyer surface mine in Dubois and Pike counties in Indiana. Morgan said Hilsmeyer is "pretty much sold out" for 2018. Hilsmeyer has customers other than Big Rivers, Morgan said, although he did not elaborate.

Hilsmeyer currently is Sun's only operating coal mine, and produced 25,633 st in the first quarter of 2018 and 117,562 st in 2017, US Mine Safety and Health Administration figures show.

According to Morgan, Sun is developing "some new surface mines" in the area that could be operational before the end of 2018. The Big Rivers contract allows Sun to source its coal from Hilsmeyer and/or the company's Buffaloville reserves in Spencer County, Indiana.

--Bob Matyi, newsdesk@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com



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