Wed August 15, 2012
Kentucky Part of $7 Billion Coal Pact with India
Coal mines in Kentucky and West Virginia will send millions of tons of coal to India, under the terms of a 25-year contract that was signed Wednesday. The deal is being hailed as a sign of hope in the coal export market.
The $7 billion deal between a New Jersey-based energy company and a coal group in India will send 6 to 9 million tons of coal annually for use in Indian power plants and steel production. There are coal mines in India, too, but production is unable to meet growing demands.
State government wasn’t involved in the negotiations, but Kentucky Governor Steve Beshear says the deal is good news for an industry that’s in a state of flux.
“International exports present a promising opportunity for Kentucky coal producers and consequently for our communities whose economic vitality depends on coal.”
Eastern Kentucky coal mines produced 68 million tons of coal last year, and most of it was used domestically. But a variety of market and regulatory factors have reduced the demand for coal in the United States, and many coal mines have laid off workers or slowed production.
Governor Steve Beshear has a news conference scheduled for Wednesday in Frankfort to announce what could be a significant boost for the coal industry in Kentucky.
State Representative W. Keith Hall told the News-Express on Tuesday that officials were expected to announce a coal mining partnership between a Kentucky group and the Indian government which could result in as much as 6 million tons of Kentucky coal being shipped to India each year. The partnership, Hall said, is expected to last as long as 25 years.
“It don’t mean nothing to me, but it’s going to mean the world to these coal miners in Eastern Kentucky,” Hall said. “At a time when the coal industry is under attack and fading fast, this couldn’t have come at a more opportune time.”
Hall said he did not have specific information on the contract which is expected to be signed announced Wednesday between the India government and the Kentucky group — which includes Booth Energy. He said, however, that the contract has room for growth.
Hall said the contract to be announced Wednesday involves the Kentucky group and a pair of Indian energy companies. He added that the Indian companies have expressed confidence that shipments to the country from Kentucky could increase as other energy groups follow suit and seek out Kentucky coal.