MARKETS

US coal heads to the Gulf of Mexico

WITH stubborn environmental resistance in the Pacific Northwest and backed-up traffic in the Atla...

Justin Niessner
US coal heads to the Gulf of Mexico

An increasing trend of port development in the Gulf of Mexico hints that US coal companies may be shifting their infrastructure strategies.

A 12% year-on-year increase in east coast coal exports last month and expanding interest in the growing terminals on Mexico and Canada’s west coasts reflect an attempt to cope with a the US’s expanding export ambitions.

However, the delays associated with long queues in Baltimore and Newport News and local committee gridlock regarding six proposed terminals in Oregon and Washington state have compelled exporters to look to more conducive regions within the US.

Although the Gulf of Mexico is far from an ideal launching point for export traffic to Asian markets, it may be faster to develop – a key advantage as Asia-Pacific competitors such as Indonesia and Australia gradually ramp up their coal export capacity.

Reporting from the HIS McCloskey Coal USA conference in New York, Bloomberg cited Kinder Morgan Terminals chief commercial officer John Schlosser on the industry’s intention to boost business in the Gulf.

Schlosser said “delay after delay after delay after delay” at Kinder Morgan’s planned 15 million ton per annum operation in Oregon has pushed the projects launch date back from 2015 to 2016.

“The coal industry really needs this capacity,” he was quoted as saying regarding the company’s efforts to expand terminals in the Gulf and the southeast.

Kinder Morgan’s Shipyard River operation in South Carolina, for example, will reportedly undergo a $200 million upgrade to boost capacity from 2.5Mtpa to 8Mtpa.

At Texas’ gulf coast port of Corpus Christi, Australia-based miner Ambre Energy has been ramping up coal exports through the Millennium Bulk Terminals-Longview and Port of Morrow facilities since last year.

Cline Mining has also approached Ports of Corpus Christi regarding coal exports in the area and despite resistance from the Sierra Club may help the Texas port move 20Mtpa of coal by 2017.

The Sierra Club has even noted that while the city’s La Quinta ship channel was originally intended to be a multi-purpose dock, proposals have been put forward to convert the entire site as a coal export bulk terminal.

Illinois Basin-focused producer Armstrong Coal told Platts in January it had begun engineering work on a coal terminal along the Mississippi River near the Gulf with a throughput capacity of 6Mt capable of expanding up to 10Mt.

The project near Myrtle Grove, Louisiana is expected to be completed in 2014.

Peabody Energy has also signalled an interest in pumping up its Gulf coal traffic with added volume shipped from Colorado to Kinder Morgan’s operation in the Houston ship channel.

Walter Energy has upped its presence in the Gulf with 2010’s acquisition of the Mobile River Terminal Company in Alabama and an increased interest in development acreage at Corpus Christi.

Much of the build-up in the Gulf is based on anticipation of the expansion of the Panama Canal, which is expected to open Gulf ports to Asian coal markets by 2014.

Cargo volume through the canal is projected to grow at 3% per year, doubling 2005's tonnage by the year 2025.

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production