Two US coal producers are becoming more involved with Asia’s coal demand. CONSOL Energy recently concluded the first sale of high-vol coking coal from its Bailey mine in northern Appalachia destined for China. Meanwhile, Massey Energy has signed a memorandum of understanding (MOU) with India’s Jindal Steel & Power Ltd (JSPL), a leading international player in the steel, power, mining, oil & gas and infrastructure industries. Under the MOU, the parties have agreed to work together and bid for the development and operation of underground coal mining projects. The major focus of the announced collaboration will be on, but not limited to, potential projects in India, Mongolia, Australia and the US.
“We believe there is great potential for synergies between Massey and JSPL,” said Don L. Blankenship, Massey’s Chairman and CEO. “We expect that by combining our technical expertise in underground mining with JSPL’s broad portfolio of international assets and businesses we will be able to establish profitable joint ventures that will both extend Massey’s coal producing opportunities and provide lower cost, more stable energy supply for Jindal’s planned global expansion.”
Under the terms of the agreement, JSPL will identify various underground coal mining projects in India and other countries and obtain necessary licences, permits and approvals from the respective government authorities. Massey will provide technical mining expertise and will be responsible for the development of detailed underground mine project plans. Massey will also provide the technical manpower and project management to ensure continuity and successful project implementation.
Massey Energy, with operations in West Virginia, Kentucky and Virginia, is the largest coal company in Central Appalachia. Based in New Delhi, JSPL produces economical and efficient steel and power through backward integration from its own captive coal and iron-ore mines. JSPL is a part of the Jindal Group.
CONSOL’s sale was made by Xcoal, as the result of an Asian Marketing Initiative it announced last month. The sale is for a Panamax vessel of some 75,000 t. The cargo is destined for merchant coke plants in the Tianjin/Guafeng area of China. The vessel will be loaded at CONSOL’s Baltimore Terminal.
“CONSOL Energy is enthused that Xcoal was able to quickly validate the concept of marketing our Northern Appalachian coal to coke plants in Asia,” commented J. Brett Harvey, President and DEO. “We have a lot more optionality with regard to our Northern Appalachian coal because of this initiative. While we’re not disclosing specific terms, I can tell you that CONSOL will receive a significant premium for its Bailey mine coal, when compared to its local thermal market. I believe that this sale will immediately establish CONSOL as a premium brand in Asia.”
CONSOL Energy is represented exclusively in Asia by Xcoal at offices in Beijing, Seoul, Tokyo, and Singapore. CONSOL Energy is a producer of metallurgical coal and high-Btu thermal coal.