Black Thunder Coal Production Not Impacted by Crane Collapse
By Jon A. Nones
02 Jun 2008 at 07:24 PM GMT-04:00
SEATTLE (ResourceInvestor.com) -- Arch Coal’s [NYSE:ACI] Black Thunder coal mine, the largest coal mine in the United States and one of the largest in the world, was temporarily disrupted due to a crane collapse on Saturday - the second such crane collapse in as many days following an accident in Manhattan. Production at the mine, however, stayed the course.
“Production was not affected,” Kim Link, Arch Coal spokeswoman, told RI. “The crane was building a new loadout and was not near active mining.”
A 2.7 million-pound crane, one of the world's largest, collapsed Saturday near Wright, Wyoming, blocking a rail line at the Black Thunder coal mine and injuring three workers. Link confirmed that BNSF Railway crews cleared the tracks by late Saturday.
Bill Denning, spokesman for the federal Mine Safety and Health Administration (MSHA) in Denver, was quoted by AP saying that the mine would be shut down while agency officials conducted an investigation. However, Allyn Davis, district manager for MSHA, said this was incorrect and only the construction area of the mine would be closed - not the mine itself.
The crane, owned and operated by Lampson International, was moving a 260-foot section of conveyor tube over the railroad when the accident occurred. The tubing was meant to enclose a new large conveyor over the railroad, used to move coal from the mine to freight cars.
The Black Thunder Coal Mine is a surface coal mine in the U.S. state of Wyoming, located in the Powder River Basin, containing one of the largest deposits of low sulfur steam (thermal) coal in the world. It was the first coal mine in the world to ship 1 billion tonnes.
In 2006, the mine produced 92.7 million tonnes of coal, nearly 20% of Wyoming's total coal production, and higher than 23 other individual coal producing states. Last year, the mine produced 86.2 million tonnes.
In a research report to clients today, David Khani, a coal analyst at Friedman, Billings, Ramsey, raised his price forecast for steam coal, used in boilers to produce electricity, by about 25% in 2009 and 2010. Average prices of steam coal have risen from $40s to $80s this year.
Source: Energy Information Administration
Khani said the steam coal market in the U.S. is undersupplied as power generation demand accelerates the need for the commodity. He said that supplies will dwindle at the end of next year and prices should rise at a rapid rate. The U.S. produces 20% of the world’s coal.
Khani said metallurgical coal, which is used in steel production, by 90% for 2009 to $130 per tonne. For 2010, he raised his expectation by 130% to $250 per tonne.
Khani raised the share price target for the whole coal sector by 87%, due to higher coal price forecast. Arch Coal’s target was raised from $74 to $101 per share. Shares were up 5% today at $68.12. |
