In a US Securities and Exchange Commission filing released late last week, the producer said the contract was signed March 16.
Under the terms of the agreement Alliance will send 3 to 4 million tons of its coal annually to the utility’s Seminole Generating Station in Putnam County, Florida, beginning January 1, 2013 and extending through 2018.
It is an extension of an already-existing teaming between Alliance and Seminole, as the partnership sells about 3.65Mtpa under an existing supply agreement. This transaction will supersede or replace that deal, and pricing will be subject to quarterly and annual adjustments.
Alliance did not indicate the specific mines providing the output, confirming only that tonnage would originate from “various mines” in the Illinois Basin.
The terms and conditions of the deal include a provision for excuse of performance if due to force majeure events but not due to negligence and coal quality standards including BTUs, moisture, ash, and sulfur.
Also, sampling and analysis will be completed in accordance with ASTM standards, and contract modifications due to governmental impositions will be permitted.
“The partnership provided a guaranty in favor of Seminole, which guarantees prompt payment when due of all amounts owed by Alliance Coal under the agreement,” the company said in the filing.
Alliance’s Illinois Basin properties include Dotiki, Gibson County Coal, Gibson South, Hopkins County Coal, Pattiki, Warrior and River View – all room and pillar operations.
It is currently permits for Sebree Mining and is constructing White Oak Resources.