Montana coal production inches upward

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Buyers in the Asia Pacific region accounted for 62% of this year’s exports, with 1.9 million tons going to Japan and 2.3 million to South Korea in the first six months. Both nations are primary destinations for Montana and Wyoming coal. India was the region’s biggest buyer with 7.9 million tons.

Export markets fueled a coal boom in Montana and Wyoming during the first six years of the past decade. Coal companies like Cloud Peak Energy and Lighthouse Resources, once the heavy hitters of Montana coal, attempted to build their own coal ports, arguing that there wasn’t enough shipping availability in the Pacific Northwest to keep up with demand. They also signed multi-million checks for mine development rights benefitting communities like the Crow Tribe.

But those big plans fell through, in part because in the Asia Pacific, Western U.S. coal companies are disadvantaged by distance. The world’s biggest exporter of all coal types, Australia, is much closer and benefits from lower shipping expenses. So does Indonesia, which is the biggest exporter of steam coal. U.S. coal exported well when prices were high, but when the market softened U.S. coal was often the odd man out.

Cloud Peak filed for bankruptcy in 2018, two years after having to suspend coal exports because of uneconomical export prices. The companies biggest mine, Spring Creek in southeast Montana, sold to the Navajo Transitional Energy Company, which hasn’t pursued exports aggressively like Cloud Peak. Spring Creek is also Montana’s largest mine. Cloud Peak had planned to build a coal export terminal near Bellingham, Washington.

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