Allerton will be Hallador’s second coal mine. Its Carlisle underground mine in Sullivan County, Ind., also a continuous miner operation, continues to thrive. Operated by Hallador’s Sunrise Coal subsidiary, Carlisle produced and sold about 3.3 million tons of high-sulfur coal in 2011, and expects to turn out almost that much this year.

Over the past three years, more than 90% of Carlisle’s coal was sold to three investment-grade customers: Duke Energy, Indianapolis Power & Light and Hoosier Energy. Last year, about 300,000 tons of Carlisle coal also was sold to Florida-based Jacksonville Electric Authority. Hallador considers the latter sale noteworthy in that it represents the first time Carlisle coal has been sold to a customer as far away as Jacksonville.

Although it has no additional contracts with JEA, Hallador said it is in contract discussions with other Florida utilities. In a recent filing with the U.S. Securities and Exchange Commission, Hallador said it believes those discussions “are the continuation of the trend of Illinois Basin coal replacing Central Appalachia coal that traditionally supplied the Southeast markets.”

Hallador told the BB&T Capital Markets Conference in Coral Gables, Fla., in late March that 2.9 million tons of Carlisle’s 2012 production is contracted at an average price of $42.31/ton. For 2013, 2.9 million tons also are contracted at an average price of $40.14/ton. For 2014, meanwhile, 1.1 million tons are contracted at an average price of $46.34/ton.

Allerton is forecast to produce about 3 million tons annually. Hallador said it has identified 54.1 million tons of reserves potentially for the mine, including 32.3 million tons already under lease.

Of the roughly 19,500 acres leased by Hallador in Vermilion County, a “considerable amount” has yet to receive any exploratory drilling. As a result, the company anticipates its controlled reserves to grow as drilling continues later this year.

Hallador said two of its customers—it did not identify them—are experiencing swelling stockpiles, and Hallador orally agreed with one of them to store 300,000 tons of coal on its property from this summer until the summer of 2013. “We will continue to sell the coal as contracted to this customer,” Hallador said. “The risks and rewards of ownership will pass from us to them. We will be paid an additional storage fee on the stored tons.”

Meanwhile, Hallador continued to work with the other customer to address its inventory issues. A possible solution also may include storing their contracted tons, Hallador said.