Document 1Q7Q4RXYEYKLM6rL0oNzONRpa

Price report Market commentary By Bob Hodge, bob.hodge@ihsrmtrkit.com RJR Mining opens a new m ine in Alabama. Production is targeted for 25,000 tons/m onth to start. Fighting the War on Coal. Letter to Trump. "We'regoing toput a lot o fcoal miners and coal companies out ofbusiness." Hillary Clinton Donald Trump has his name on everything from hotels to high rises to restaurants. Now he has his name on a coal excavator. If you head to Alabama and visit the new - and as of now not-yet named -- m ine that began producing last week for RJR Mining Co., you can see "Trump" the excavator. The name was th e brainchild of RJR's Randy Johnson, who believes that w ithout Trump (the president) there would be no Trump (the excavator) because there would be no new mine. As the coal market has steadily improved over th e past year, RJR -which had been idle since 2014 - decided to begin producing again and soon expects to be shipping 25,000 tons of metallurgical, industrial and therm al coal from the new operation in Jefferson County, Ala. The m ine has the potential to produce as much as 40,000 tons a m onth, w ith most of the coal likely staying in state but some destined for the export met market and, well, wherever a high-Btu, low-ash coal is needed. Johnson, who cut his teeth in the coal business w ith Drummond and went on to be a driving force behind the Alabama Coal Cooperative, believes now's the tim e for the coal industry to make a stand and get the word out: Sticking it to the U.S. coal industry is a problem, not a solution. "People are so misinformed about everything about th e coal industry," Johnson said just a couple of clays after th e m ine began loading its first coal. "Just let us do our job." War on Coal combat At age 71, most people have either retired or are w anting to retire, but Johnson figured that was a good age to jump back into th e coal Bluestone to open three E. Ky. mines By Steve Hooks, steve.hooks@ihsmarkit.com Bluestone Energy Group plans to reopen four surface mines in eastern Kentucky, gearing up for a possible 110,000 tons/ month of production that will go to domestic therm al and international metallurgical coal markets. The mines being reopened are th e following, according to the company: <Bent Mountain in Pike County, to produce 20,000 tons per m onth of steam coal, all being sold domestically. The operation last produced in the third quarter of 2016, MSHA records show, w ith 125,330 tons of output. Beech Creek, also in Pike County, to produce 60,000 tons per month ofhigh-vol "A" m et coal to be sold on the export market. The mine last produced 35,123 tons in the third and fourth quarters of 2017. <*A&G Job 4,30,000 tons per month, with half of that steam coal and half high-vol "B"met coal. The steam coal will be continued on page 3 Confidential. 2018 ins Ma"', Ail rights re Sierra Club v. EPA 18cv3472 NDCA Tier 7 1HS Markit" ED 002061 00178213-00001 IMS Markit Coal & iYnergy industry. It was Obama's War on Coal th a t drove him to the sidelines in the first place, and he believes it's th e current adm inistration's counterattack that has paved the way for the current, smaller-butvibrant industry. Johnson said that even though the War on Coal was poopooed by the U.S. media, there wasn't anyone in the industry from Alabama to Allentown who wasn't caught up in the fight. "Before Obama got in office, when we needed to get a permit, it took about five m onths and between $35,000 to $50,000," he said. "We got w ith th e state and the OSM and we got things worked out." There were the usual delays and some nitpicks along the way, but in the end the perm itting process ran about as smooth as anything handled by a government bureaucracy. Then along came the Obama administration. "The last perm it I got cost us over $270,000 and took over two years," Johnson said. "Nothing had changed, but now you had all these people involved and they would always come up w ith some new question. Answer that question and they would come up w ith something different." At one time, he says, there were 51 permits, some more important to Alabama operations than others, that were being held up by the bureaucrats. Johnson described a m eeting about a perm it th at involved 17 different people from the local level all the way up to the feds "because we were close to a creek." "We had to go out and look for arrowheads, then there wnuld be some questions about some kind of plants, and then we would have to look at the fish ... it didn't m atter how you answered the questions; they just would come up w ith new ones." A different vibe Johnson said getting the new m ine up and running wasn't done on a lark because the investm ent is simply too big. Even though he wasn't actively mining coal himself, he was still the president of the Alabama Coal Cooperative, which he helped found in 1990. He said not only does the new mine have good coal - it will cut through four seams and average between 12, 200 to 12,600 Btu/lb. w ith 1.1 to 1.2% sulfur - but there had to be a place to market it. "We are going to develop th e m ine slowly because wre've got to make sure we can sell th e coal," Johnson said. "We're not trying to go too fast because if you go too fast, you make mistakes." The operation currently has 18 employees at the facility and expects to be adding more. "We have guys calling us who are 50 and 60 years old and saying `Keep me in mind.'They've worked in th e coal industry and they would like to get back into it." Johnson said that when the Obama administration was "coming up w ith a new regulation every day," it was th e people working in th e industry "that they just didn't care about at all." He said that th e people in the Trump administration stopped a lot of new regulations from going on the books and th at is, in part, why he was able to jum p-start RJR. Letter to Trump In fact, he feels so strongly about that th at not only did he name the m ine's excavator after the president, he wrote him a letter back in June that summed up his feelings with a thank you. In part, the letter said: The "War on Coal"is over. RJR has been idle since February 2014. Wefinished mining one reserve and sold another and since we were in our late 60% we decided to stop. But, you have shown us age does not matter so we are opening another mine. This will be the largest reserve we have ever mined. This will be the largest capital investment we have ever made. We will provide more jobs than we ever have. You have restored our confidence and excitement, and our desire to stay involved. It is common practice in the mining industry to name the "big machines."Wejust purchased a 2.7 million-dollar excavator and we have named it TRUMP! We have enclosed apicturefo r your enjoyment. Mr. President, we are extremely proud ofyou. Keep fightingfor us and we will stand with you. Let's Keep America Great! God blessyou, yourfamily, your staffand every singleperson whofights alongside you every day. And, God bless the United States o fAmerica. Johnson said the letter has spawned a small media frenzy, with newspapers and magazines wanting a picture of Trump (the excavator) and some calls from radio stations for interviews. "We need to get our side of the story out," he said. "Maybe this will help." Confidential, 22 20IS IMS Markin". All rights rssen Sierra Club v. EPA 18cv3472 NDCA Tier 7 us 132 i Volume 20 j 11 Ju ly 2018 ED 002061 00178213-00002 HS Mr kit Coal & energy Bluestone to open... continued from page 1 sold domestically and th e m et coal will be sold on the export market. No MSHA production data could he found for A&G Job 4, The MSHA database lists a number of A&G Coal Gorp. operations in Virginia and one in West Virginia, all of which are surface mines th at are temporarily idled or nonproducing. A & G Coal and Kentucky Fuel Corp., listed as operator of Bent M ountain and Beech Creek, are controlled by Jillean L. Justice and James C. Justice III. James C. Justice II is listed as controller ofBluestone Coal Corp. He is the governor of West Virginia. Bluestone indicated the company will hire 150 workers and hiring is taking place at all three sites. No timetable for production startup was provided. Justice cos. face Xcoal lawsuit Xcoal Energy & Resources is suing James C. Justice II, Bluestone Energy Sales and Southern Coal Corp. over a coal supply agreement entered into on Oct. 19, 2017, alleging breach of contract. Xcoal is asking for "damages and/or other amounts in excess of $75,000.00, exclusive of interests and co sts..." W hile details deemed "confidential" were redacted in a July 2 filing in U.S. District Court in Delaware, Xcoal is charging that the defendants "have substantially and materially breached their respective obligations under th e (coal supply agreement by) failing to timely supply the quantity and quality of coal required under the CSA, and by otherwise failing to honor their other respective obligations under both th e CSA and th e guarantee." The coal supply agreement "provides for the sale of a specified quantity and quality of metallurgical grade coal by Bluestone to Xcoal," the complaint states. "Bluestone's inability and/or failure to perform continued into May 2018, and finally culminated in XcoaTs cancelation of the CSA on May 31, 2018, with full retention and preservation of its rights and remedies for Bluestone's breach and default," th e complaint continues. It also alleges: "Although testing at Bluestone's loadout indicated th at th e coal's quality was compliant w ith the specifications set forth in the CSA, sampling at th e port revealed th at the quality of this coal was well below th at specified in the CSA." In its response, filed on June 27, Bluestone et al. categorically denied a number of the allegations, and alleged in tu rn th at "Xcoal knew th e load dates were commercially unreasonable because Bluestone could not physically load the coal fast enough to m eet th e scheduled load dates (and) Xcoal demanded unilateral terms and conditions on the loading of trains th at were not set forth in th e CSA," among other circumstances. Navajo company buys Four Corners share Navajo Transitional Energy Company has finalized a transaction to acquire a 1% ownership interest in units 4 and 5 of the Four Corners Power Plant, the company said Monday. Under th e purchase and sale agreement, NTEC purchased th e 7% interest from 4C Acquisition, LLC, an affiliate of Arizona Public Service Company, which operates the power plant. The agreement was executed last week, and the transaction closed on July 2, NTEC stated. "As a result of the tra nsaction, NTEC, a business entity wholly owmed by th e Navajo Nation, becomes an owner o f a coal-fired power plant, a first for a Navajo Nation enterprise," th e company said. "Concurrently w ith NTEC's purchase of th e FCPP interest, NTEC and Arizona Public Service Company also entered into an amended and restated coal supply agreement, which governs FCPP fuel purchases from NTEC," the statem ent continued. "The amended and restated coal supply agreement provides NTEC w ith more flexibility in the sale and purchase o f coal from NTEC's Navajo Mine." NACCO Industries' Bisti Fuels is mining the coal for NTEC, which serves as th e fuel procurement agent for the power plant. The surface m ine in San Juan County, N.M., produced 417,659 ofbitum inous coal in th e first quarter of 2018, according to MSHA data, and 3.7 million tons last year. The dedicated mine supplied 580,224 tons of the coal to Four Confidential, 22 2018 IMS McrkiCG All rights rss e r Sierra Club v. EPA 18cv3472 NDCA Tier 7 us 132 I Volume 20 j ii J u l y 2018 ED 002061 00178213-00003 MS Mrirkit I Coal & energy Corners in th e first four m onths of 2018, according to the latest EIA fuel-delivery data. The power plant also takes natural gas. The coal is transported from the mine to the plant by a dedicated, electrified railroad. In connection w ith these transactions, NTEC was also able to pay off the remaining balance of its term loan that was used to refinance NTEC's purchase of th e Navajo mine from BHP Billiton in 2013. NTEC is 100 percent owned by the Navajo Nation. The Four Corners plant is a 1,540-megawatt facility located on Navajo Nation property in Fruitland, N.M. Four Corners was originally a five-unit plant. Units 1-3 were retired at th e end of 2013. APS owns 63% of th e remaining units 4 and 5 following th e acquisition of Southern California Edison's interest. APS has a total entitlem ent from. Four Corners o f 970 megawatts. 4CA owned 7% of units 4 and 5 following its acquisition of El Paso Electric's interest. InterContinental Mark Hopkins Confidential, Q 2018 IMS Markin". All rights reserved. Sierra Club v. EPA 18cv3472 NDCA Tier 7 issue 132 I Volume 20 i !! Ju ly 2.018 ED 002061 00178213-00004 $58.00 Sierra Club v. EPA 18cv3472 NDCA Tier 7 ED 002061 00178213-00005 _^ ^3 CO CD p ro P o o o o o o oo PRB8800 Prompt Month 6/8/2018 6/9/2018 6/10/2018 6/11/2018 6/12/2018 6/13/2018 6/14/2018 " 6/15/2018 6/16/2018 6/17/2018 6/18/2018 6/19/2018 6/20/2018 6/21/2018 6/22/2018 6/23/2018 6/24/2018 6/25/2018 6/26/2018 6/27/2018 6/28/2018 6/29/2018 6/30/2018 7/1/2018 7/2/2018 7/3/2018 7/4/2018' 7/5/2018 7/6/2018 7/7/2018 7/8/2018 7/9/2018 7/10/2018 ....PRB8400 Prompt Month HSMnrklt I C03I& Energy AIV C c11n 1 A11if .in liil l l MliililwIlMliliiliMli fi1if I Ann I..'Ao Australian Coal Report ENERGY Capability Publication products and services * ' * I I' t' ' . Indian Coal Report . i! . J ' Coalfax 1; v * , * South African Coal Report ' ' 1" * \ 1 l 1 1 I , 1, ' l 1 f.on I )if f P n in m id inti-' os Oonudentlah O 2018 IMS M e rk ird All rights reserved. Sierra Club v. 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