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Peabody To Retain Metropolitan Coking Coal Operation in Australia

Peabody will retain the Metropolitan metallurgical coal mine and its associated 16.67% interest in Port Kembla Coal Terminal after proposed purchaser South32 terminated the purchase contract. South 32 was unable to obtain clearance from the Australian Competition and Consumer Commission (ACCC) within the timeframe required under the contract.

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Peabody Energy Announces Closing of $1B Offering

In mid-February, Peabody Energy closed its previously announced private offering of $1 billion aggregate principal amount of senior secured notes, consisting of $500 million of 6% senior secured notes due in 2022 and $500 million of 6.375% senior secured notes due in 2025. The net proceeds of the offering have been funded into an escrow account pending Peabody’s emergence from bankruptcy.

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EIA: Coal Production to Increase in 2017

Coal production in the United States is expected to increase slightly in both 2017 and 2018, reversing recent declines, primarily because of rising natural gas prices, according to a new report by the U.S. Energy Information Administration (EIA).

The federal agency’s short-term energy outlook, issued in early February, said coal output in the nation totaled 739 million tons in 2016, an 18% decline from 2015 and the lowest level of coal production since 1978. Nowhere was this decrease more pronounced than in Kentucky, once the leading coal producer in the U.S. Kentucky’s coalfields are located in both the high-sulfur Illinois Basin (ILB) in western Kentucky and Central Appalachia in eastern Kentucky. The 42.6 million tons of coal mined in the commonwealth last year was its lowest yearly total since 1939.

As the EIA noted, the vast majority of coal produced in the U.S. is used to generate electricity, with smaller amounts of metallurgical coal marketed domestically and overseas for steel production. As a result, coal production and coal-fired electricity generation are closely connected. In recent years, coal production has been hurt by utilities switching from coal to gas to take advantage of historically low natural gas prices. But with average gas prices forecast to climb well past $3/MMBtu over the next two years, “coal is expected to regain some of the electricity generation mix, and coal production is expected to increase slightly,” said the EIA.

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Anglo American to Sell Eskom-tied Coal Operations in South Africa

Anglo American announced a $164 million deal to sell its Eskom-tied domestic thermal coal operations in South Africa to a wholly owned subsidiary of Seriti Resources Holdings Pty Ltd, a company majority owned by historically disadvantaged South Africans (HDSAs) and led by a management team with extensive experience of operating and developing large coal mines in South Africa.

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Joy Global Will Be Renamed Komatsu Mining

Komatsu America Corp., a subsidiary of Komatsu Ltd., has completed its acquisition of Joy Global Inc., a worldwide leader in high-productivity mining solutions. Retaining its headquarters in Milwaukee, Wisc., Joy Global will be renamed Komatsu Mining Corp. and operate as a subsidiary of Komatsu. The company said it will continue to promote and invest in the P&H, Joy and Montabert product brands.

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