If this year follows true to form, then the privately owned Indianapolis-based company will sell out the approximately 2 million tons or so it plans to produce before the curtain falls on 2016. Felson Bowman, Solar’s founder decades ago and chairman, is not complaining, given the many challenges facing the industry.
“We’ve got some long-term contracts and we’re picking up some smaller orders,” Bowman said in January.
Historically, Solar has sold coal to U.S. electric utilities, particularly those operating in its home base of the Midwest. Many utilities in the region are located in the Midcontinent Independent System Operator region, a Carmel, Indiana-based regional grid operator, where coal-burning generation still accounts for more than 50% of total output, much higher than coal’s roughly 30% share nationally.
Solar’s two operating surface mines in southern Indiana — Shamrock in Dubois County and Antioch in Daviess County — produced about 1 million tons a piece in 2015 and are expected to repeat that performance this year.
The Indiana Department of Natural Resources’ Division of Reclamation is reviewing Solar’s recently submitted application to add nearly 900 acres at Antioch, near the Amish community of Montgomery. If approved later this year, the additional acreage would lengthen the mine’s life by an estimated two to five years, although production would not change appreciably.
Still on the back burner, as it has been for the past several years, is Solar’s proposed new underground steam coal mine, Charger, in Pike County, Indiana. The company had hoped to place Charger in operation by now. The mine would produce at least 1 million tons of high-sulfur coal annually, perhaps as much as 2 million tons a year.
But it continues to remain on the sidelines, awaiting favorable market signals. Should they emerge, Bowman said Charger could be up and running in a matter of months. Over the years, Solar has carved out a successful niche for itself. While some of its larger competitors went deep into debt in recent years to buy out other producers, Solar officials figuratively and literally kept their heads down and did what they do best — mine coal as inexpensively as possible.
They plan to continue to do that in 2016. Now, though, as Bowman acknowledged, they also are “looking for opportunities,” most likely distressed assets Solar could snap up at a fraction of their original value and profitably incorporate into its portfolio.