The company, in a November filing with the federal Securities and Exchange Commission, said its Carlisle mine in Sullivan County has a contract that requires Hallador to blend coal from Ace to meet sulfur specifications. The two mines are operated by Hallador’s Sunrise Coal subsidiary.

Although Hallador did not identify the contract in question, the company has supplied coal to Jacksonville Electric Authority in Florida, in addition to three Midwestern electric utilities: Indianapolis Power & Light, Duke Energy and Hoosier Energy.

Ace, which opened earlier this year in Clay County and started shipping coal in August, has coal with an average sulfur content of about 1.5 lb/MMBtu and a heat content of about 11,400 Btu/lb. The mine is capable of producing a maximum of 500,000 tons a year. Hallador’s coal reserves also have lower chlorine levels, 0.10%, than average IB reserves of 0.22%.

Hallador is blending Ace coal with Carlisle’s coal, which has an average sulfur content of 4.5-6 lb/MMBtu and an average heat content of 11,500 Btu/lb.

“Blending Carlisle coal to a lower sulfur specification will enable us to market Carlisle coal to more customers,” the company said. In addition to the afore-mentioned contract, Hallador also expects to ship low-sulfur coal from Ace directly to unscrubbed customers that require low-sulfur coal.

As of November, Ace had 20% of its capacity contracted for both 2013 and 2014. Carlisle, meanwhile, was expected to produce and sell roughly 3.1 million tons in 2013, up slightly from 3 million tons in 2012.

Hallador said it had sales commitments of 825,000 tons in the fourth quarter at an average price of $43.99/ton. In 2014, it has sales commitments of 3,145,000 tons at an average price of $42.96/ton. And, in 2015, it has sales commitments of 1.2 million tons at an average price of $41.40/ton.

In the third quarter, Hallador sold 817,000 tons at an average price of $42.82/ton. That compared with sales of 810,000 tons at an average price of $44.63/ton in the third quarter of 2012. Ace contributed 34,000 tons of sales in the third quarter, including 17,000 tons each of low-sulfur and high-sulfur coal.

For the first nine months of 2013, Hallador sold 2,431,000 tons at an average price of $42.42/ton. In the comparable period of 2012, the company sold 2,255,000 tons at an average price of $43.57/ton. The lower average price for the 2013 period was due to the mix of Hallador’s various contracts.

Operating costs and expenses averaged $28.37/ton in 2013 versus $25.72/ton in 2012. The company attributes the increase primarily to poor mining conditions in January, February, April and May of 2013.

Hallador continues to pursue two new underground mines in neighboring Illinois — Bulldog in Vermilion County and Russellville in Lawrence County. The company has leased about 19,300 acres containing an estimated 35.6 million tons of reserves in Vermilion County and 11,000 acres containing 29.4 million tons of reserves in Lawrence County.