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KenAmerican mine added as supplier to Foresight coal contract

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KenAmerican mine added as supplier to Foresight coal contract

Murray Energy Corp.'s KenAmerican Resources Inc. subsidiary in western Kentucky will be allowed to supply up to 100,000 tons per year of 11,700 Btu/lb coal in both 2018 and 2019 under a contract amendment reached between Big Rivers Electric Corp. and Foresight Coal Sales, according to a new regulatory filing.

An original Feb. 6, 2015, arrangement between Henderson, Ky.-based Big Rivers and St. Louis-based Foresight Energy called for the delivery of 1.16 million tons over a five-year period from Foresight's Deer Run and Shay No. 1 (Macoupin) mines.

Deer Run has been mostly idle since March 26, 2015, because of a combustion event that resulted in elevated carbon monoxide levels.

According to a recent filing with the Kentucky Public Service Commission, Big Rivers and Foresight Coal Sales agreed in late February to amend the contract to add KenAmerican Resources' Paradise No. 9 underground mine in Muhlenberg County, Ky., as a potential supply source.

The revised agreement calls for KenAmerican to truck coal from Paradise 9 to Big Rivers' 417-MW D.B. Wilson power plant along the Green River, roughly 25 miles away.

The original deal provided for coal from Deer Run and/or Macoupin to be delivered to Big Rivers f.o.b. barge at the Sitran Coal Terminal at mile post 817.5 on the Ohio River.

In addition to the minimum heat rate of 11,700 Btu/lb, coal specifications under the contract include maximum ash of 7.91 lbs/MMBtu, maximum moisture of 10.09 lbs/MMBtu and maximum sulfur of 2.61 lbs SO2/MMBtu.

Paradise 9 produced 1.5 million tons of coal in 2017 and 1.9 million tons in 2016, U.S. Mine Safety and Health Administration figures show.

Bob Matyi is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.