SunCoke plans volume increases at Wayne County coal terminal - Beckley, Bluefield & Lewisburg News, Weather, Sports

SunCoke plans volume increases at Wayne County coal terminal

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SunCoke Energy Partners plans to increase the amount of coal that moves through its Kanawha River Terminals operation in Wayne County by 22 to 38 percent in the next two years.

And it expects to begin construction on a new coal coking plant a few miles down the Ohio River at South Shore, Ky., before the end of this year.

"When we bought this asset, it was underutilized," Mike Thompson, president and chief operating officer of SunCoke, said at an investor presentation March 11.

SunCoke acquired KRT last year for $86 million.

KRT is a metallurgical and thermal coal blending/handling terminal service provider with the collective capacity to blend and transload more than 30 million tons of coal annually, although last year it handled only 16 million tons. KRT owns four coal handling facilities, the largest of which is the Ceredo terminal. The terminal has both inbound and outbound rail logistics provided by CSX and Norfolk Southern and the capability to offload and load barges. The Ceredo terminal serves domestic and international export markets.

Thompson said he expects KRT to increase its capacity in four markets. Third-party domestic coking could add a half million tons per year. KRT could handle another 1 million to 2 million tons as Central Appalachian thermal coal rebounds, and it could handle a similar amount in blending coal from the Illinois Basin. And the new coking plant in Kentucky could add another million tons for total new volume of 3.5 million to 6 million tons, he said.

"We're off to a good start with this asset," Thompson told investors.

Thompson said SunCoke is in discussion with steelmakers to increase met coal tonnage moving through KRT, and it is exploring opportunities to expand with public utilities.

The new coke plant could receive its air permit in the second quarter of this year. Construction could begin construction in the fourth quarter of this year once SunCoke secures an anchor customer, Thompson said. The plant could make its first deliveries in the first quarter of 2017. It would be an investment of $375 million to $440 million.

The new coke plant will have 120 ovens and an annual coke production capacity of 660,000 tons. It should also produce about 60 megawatts of electric power generation. It would supply customers on both the contract and spot markets. It will use a new modular design with a 30 percent smaller footprint and a modular design to enable future expansion.