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Uinta coal production ticks up in Q2, but down 2 million tons from last year

Coalproduction at top-producing mines in the Uinta Basin modestly in the second quarterof the year but remained down 24% from the same period last year, followingpredictions that much of the region's output could halt completely within thenext decade-and-a-half.

Accordingto an S&P Global Market Intelligence analysis of data compiled by the U.S.Mine Safety and Health Administration, production at the basin's top producing minesfell from 8.4 million tons in the second quarter of 2015 to about 6.3 milliontons in the latest period. While this marked an increase from the5.6 million tons produced in the first quarter of this year, the basincontinues a long-term decline.

Inthe latest 12-month period, production from those mines fell from 37.4 milliontons to 27.2 million tons, a difference of 27%.

Likerecent quarters, the basin's mines have been hardest hit by declining demandfrom domestic U.S. electricity generators and low-cost natural gas, which hasspurred an increased number of utilities to shift to the lower-cost option.

Thecontinued collapse ofthe basin's output comes a little over a month since Murray Energy Corp. founder, CEO and President RobertMurray told S&P Global that he expectswestbound production in the Uinta to cease by 2030.

"UintaBasin coal going west and power from coal in Utah going west is going to betotally eliminated in time so that's why I said five years ago that the UintaBasin would be destroyed," Murray said, adding that Colorado was not doingmuch better. "I see a rapid decline in the Uinta Basin."

Uintamines include those in Utah and Colorado. Murray operates two mines in theUinta Basin, Lila Canyon and West Ridge, both in Utah.

Murray'sLila Canyon mine saw output sharply increase during the second quarter of theyear, marking the second-largest percentage increase for the 12-month period.Previously, company spokesman Gary Broadbent attributed the growth to the minenot being operational during the first half of 2015.

Thecompany's West Ridge mine reported no production for the first half of 2016.

Onceagain, Bowie Resource PartnersLLC's Sufco mine led the pack with 1.3 million tons for thequarter, while finishing the 12-month period with 6.1 million tons, marking a4.4% increase over the same period in 2015.

However,the mine's production marked a decline from the 1.6 million tons it produced inthe first quarter of 2016 and the 1.7 million tons it produced in the secondquarter of 2015.

Bowie'sSkyline No. 3 mine finished the quarter as a close second, producing 1.2million tons for the period and 4.6 million tons for the 12-month period, a10.4% increase over the previous year.

Withthe exception of Rhino ResourcePartners LP and RoyalEnergy Resources Inc.'s Castle Valley No. 3 mine, which increasedproduction by 325% for the 12-month period, most of the basin's remaining minesshowed declines in output for the 12-month period.

AlongsideMurray's West Ridge, the ADDCAR System 18 HWM Serial No. 23018, Bowie No. 2 andDeer Creek mines showed no production for the quarter, with Nielson Holdings'Deer Creek facility dropping to zero for the 12-month period as well.

InJune, S&P Global Market Intelligence found that Uinta Basin production had tumbled more than26% since 2010, with jobs dropping over a third during the same period.

Lastyear, production in Coloradoalone fell to a 23-year low.