“This transaction gives us a direct stake in participating in the growth of U.S. coal exports off the West Coast,” said Steven F. Leer, chairman and CEO, Arch Coal. “With our superior operating position in the Powder River Basin and Western Bituminous Region, we have the capability to service growing coal demand in Asia, the world’s largest and fastest-growing coal market. We believe this first project—along with others in the pipeline—will provide Arch with more exposure to the seaborne thermal market and will further unlock the value inherent in our western coal assets.”
Under terms of the agreement, Arch will control 38% of the terminal’s throughput and storage capacity to facilitate export shipments of coal off the west coast of the United States. The facility will be capable of handling panamax-sized vessels, which account for the vast majority of the seaborne thermal coal trade for the Asia-Pacific market. The terminal also is dual served by the Union Pacific and Burlington Northern Santa Fe railroads, which will provide Arch with the flexibility to export its southern Powder River Basin and Western Bituminous coals, and eventually coal from its recently-acquired Montana reserves.
The MBT terminal, a former aluminum smelter site, is currently operated as a bulk commodity facility. MBT continues to work on obtaining the required approvals and necessary permits to complete dredging and other upgrades to enable coal, alumina and cementitious material shipments through the brownfield terminal. Once completed, coal shipments could begin in 2012. As currently planned, the MBT facility will use existing infrastructure with some minor modifications to handle loading 5 million tons of coal per year in addition to other types of bulk commodities.