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Uinta Basin increases YOY coal production in Q3, reversing downward trend

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Uinta Basin increases YOY coal production in Q3, reversing downward trend

Coal production in the Uinta Basin increased 10.7% year over year in the third quarter after two straight periods of decline.

The basin, which includes some operations in Colorado and Utah, also saw 4.4% growth from the second quarter. Its two largest mines posted substantial increases over the second quarter of 2018 and the third quarter of 2017.

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Arch Coal Inc.'s West Elk mine was the basin's leading producer with 1.3 million tons, a 49.8% boost from the year-ago period, according to data compiled by S&P Global Market Intelligence. Its third-quarter production also was 27% higher than the second quarter.

Arch President and COO Paul Lang said on an Oct. 23 earnings call that there is global interest in the Colorado mine's coal, which has lower sulfur and ash content. About two-thirds of West Elk's coal will be exported in 2018, said Deck Slone, senior vice president of strategy and public policy.

The Skyline No. 3 mine, owned by Galena Private Equity Resources Fund and Cedars Energy LLC and operated by Wolverine Fuels LLC, formerly called Bowie Resource Partners LLC, produced 1.3 million tons of coal during the quarter, a 108.7% increase from the second quarter and a 29.2% increase from the year-ago period. The companies' Sufco mine, which trailed Skyline's production with slightly less than 1.3 million tons, had a 19.9% quarter-over-quarter uptick and a 6.9% drop from the prior-year period. Dugout Canyon's output fell to just 99,000 tons from 169,000 a year ago.

Murray Energy Corp.'s Lila Canyon mine saw the basin's largest quarter-to-quarter production drop at 58.5%, from 779,000 to 323,000 tons.

"Utah American Energy, Inc. encountered geological conditions that slowed mining at its Lila Canyon Mine," a Murray Energy spokesperson said. "We have overcome those conditions and production has returned to expected levels."

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Though Peabody Energy Corp.'s Foidel Creek mine was the basin's second-largest producer in the second quarter, it dropped to fourth place in the most recent period. The mine produced 742,000 tons of coal, a 28.4% decrease from the second quarter and 10.8% decrease from the year-ago period.

Tri-State Generation and Transmission Association Inc.'s Colowyo mine increased its tonnage from 394,000 tons in the second quarter to 466,000 tons in the third, an 18.3% uptick, while production decreased by 22.6% from the third quarter of 2017.