Mining News: News Nuggets: UCM coal exports slow, Alaska demand rises

Aurora Energy Services LLC, the company operating the Seward Coal Loading Facility on behalf of the Alaska Railroad Corp., Sept. 22 said the facility will be idle for the remainder of 2015. The facility loads coal shipped by rail from Usibelli Coal Mine Inc.’s Healy operations onto ships bound for delivery to customers along the Pacific Rim. A drop in coal prices, coupled with a strong U.S. dollar, has weakened the demand for coal from Alaska. Usibelli mined roughly 1.5 million short tons of coal in 2014, its 71st year of operation. Roughly 1 million tons of the ultra-low sulfur subbituminous coal mined from the Usibelli operation near Healy was delivered to six power plants in Interior Alaska, while the remaining 500,000 ton was shipped overseas. Usibelli coal exports peaked in 2011, when the family-run business shipped 1.2 million tons of coal to customers in Chile, South Korea and Japan.

An increase in domestic sales is somewhat offsetting weaker global demand. This year Usibelli anticipates coal sales to total 1.25 million tons, which included two shiploads of coal sent to Japan. For 2016, the company anticipates sales to increase to about 1.4 million tons of coal, including two additional shiploads bound for Japan. The ramp-up of operations at Golden Valley Electric’s Healy Unit #2, formerly known as the Healy Clean Coal Power Plant, is the key driver for the anticipated increased domestic demand for Usibelli coal. This lower emissions facility, which has the potential to provide 50 megawatts of power to the Alaska railbelt electrical grid, is located next to Usibelli’s Healy operations. A dedication ceremony marking the restart of Healy Unit 2 was held at the lower emissions facility on Sept. 22.

- Shane Lasley