Kentucky Gov. Steve Beshear, a Democrat from western Kentucky’s coal country, announced the $7 billion, 25-year private-sector agreement last summer, at the time touting the transaction as an example of the Commonwealth’s aggressive efforts to market one of its most valuable “home grown” commodities – coal – overseas.
When deliveries did not start last September as initially expected, some of the principals involved shrugged off the delay, saying it was only a matter of time before Abhijeet would give the final go-ahead for the coal to start flowing, mostly from steam coal mines owned by Booth Energy. The privately-owned coal company, owned by Jim Booth, operates mines in both eastern Kentucky and West Virginia.
From the beginning, however, some coal industry observers were skeptical about the arrangement, questioning both its magnitude and pricing. They also wondered why the Indian company was interested in buying so much steam coal, instead of metallurgical coal, although Abhijeet is, among other things, a power development company in India.
According to the company’s website, it is developing three thermal power projects with an installed capacity of 2,671.6 mw in the Indian states of Maharashtra, Jharkhand and Bihar.
Repeated attempts to reach FJS’ domestic office in Morristown, N.J., for comment were unsuccessful. Since the original announcement, Abhijeet has not talked publicly about the agreement, including releasing specifications for the coal to be purchased, labeling that as “proprietary” information.
River Trading Co., based in Cincinnati, is supposed to load the coal onto barges at a Big Sandy River terminal in eastern Kentucky for transportation to Associated Terminals on the lower Mississippi River near New Orleans, La. John Grantham, River Trading’s vice president-East Division, said in February he did not know if the exports will commence this year, at one point suggesting such a scenario is “doubtful” in 2013.
Although skeptics say India can get coal from South Africa and other countries cheaper than from Central Appalachia, Grantham said he is confident the deal will go forward. The question is when.
