Business
3:22 pm
Wed August 15, 2012

Kentucky Mines Sign $7B, 25-Year Coal Contract with India

Coal mines in Kentucky and West Virginia will send millions of tons of coal to India, under the terms of a 25-year contract that was signed Wednesday. As Kentucky Public Radio’s Erica Peterson reports, the deal is being hailed as a sign of hope in the coal export market.

The $7 billion deal between a New Jersey-based energy company and a coal group in India will send 6 to 9 million tons of coal annually for use in Indian power plants and steel production. There are coal mines in India, too, but production is unable to meet growing demands.

State government wasn’t involved in the negotiations, but Kentucky Governor Steve Beshear says the deal is good news for an industry that’s in a state of flux.

“International exports present a promising opportunity for Kentucky coal producers and consequently for our communities whose economic vitality depends on coal,” said Beshear.

Eastern Kentucky coal mines produced 68 million tons of coal last year, and most of it was used domestically. But a variety of market and regulatory factors have reduced the demand for coal in the United States, and many coal mines have laid off workers or slowed production.