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New US coal prospects 'very limited,' says supplier to suspended Kemper project

Opportunities for new coal mining projects in the U.S. are likely "very limited," according to the miner who was to provide fuel for a suspended coal gasification project that aimed to demonstrate the potential of carbon capture technology.

The current regulatory environment for developing new coal projects has improved, but low natural gas prices and growth in renewable energy sources could unfavorably affect the amount of electricity generation attributed to coal-fired power plants over the long term, NACCO Industries Inc. wrote in a March 7 earnings report. NACCO's Liberty Fuels Co. LLC was the sole coal supplier to Southern Co.'s generation project in Kemper County, Miss., that was suspended after billions in cost overruns and delays.

Liberty Fuels is being compensated as a contractor to complete the final closure of the lignite coal mine that was supposed to fuel Kemper's coal gasification plant. NACCO said it is still seeking new coal mining projects but is also pursuing noncoal mining opportunities.

Peabody Energy Corp., the largest coal mining company in the U.S., recently wrote in an investor presentation that it is unlikely to invest in new greenfield coal projects in the U.S. where thermal coal markets have been in decline.