By RONNIE ELLIS
CNHI News Service
The beleaguered Kentucky coal industry may have gotten a big boost Wednesday when Gov. Steve Beshear announced a cooperative arrangement between coal companies and India.
It may even lead to the re-employment of some laid-off miners suffering from the downturn in the domestic coal market.
On the day India observes its independence as a sovereign country, Beshear announced that New Jersey-based FJS Energy has signed a 25-year, $7 billion contract with India’s Abhijeet Group to purchase coal from Kentucky and West Virginia through Kentucky-based affiliates FJSE Marshall and FJSE River Coal.
“We think we’re going to be able to re-employ some people in eastern Kentucky,” said Jim Booth of Booth Energy based in Inez. “Three years ago my company was mining 8 million tons and today we’re mining 6 million tons. So we’re very excited about this.”
Dr. M.P. Narayanan, FJS Energy board chairman and former chairman of Coal India, said even though India is the world’s third-largest coal producer, it must still import coal for its exploding population and energy needs from Indonesia, South Africa and Australia.
But with the construction of larger ports in India, which allows larger freighters carrying greater payloads of coal, importing American coal from greater distances is now feasible.
“Not only we are going to get coal from you,” Narayanan told Beshear at a capitol news conference, “we are getting clean coal.” He didn’t explain why Kentucky’s coal is cleaner. Kentucky coal companies are expected to export about 9 million tons a year to India through the agreement.
Beshear said state government had no role in negotiating the cooperative agreement but hailed the deal as a “great example of a new market for Kentucky resources.”
“The import of coal will help us meet India’s increasing demand for energy and steel,” said Anand Kumar, executive director of Abhijeet Group. “This partnership is an example of the strong potential between American producers and Indian customers. We see a significant growth of our mutually rewarding relationship.”
State Rep. Keith Hall, D-Phelps, was credited by Booth and Beshear for “relentlessly” working to bring the Kentucky coal producers and FJS together over the past year.
Hall, from Kentucky’s largest coal-producing producing county of Pike, said the coal market “has died a slow death in America and we had to go international.”
He said he’s glad Beshear “gets it. We’ve got a governor who understands the business; he’s a friend to coal.”
Hall echoed Narayanan’s statement that both companies and countries will benefit from the arrangement. “We need them; they need us; it’s a perfect marriage.”
Narayanan said he expects the first shipment of coal to occur sometime in September.
River Trading Company specializes in transporting coal though it neither mines nor sells it, according to the company’s president, John Grantham. He said his company will serve somewhat as a broker between the Indian companies and coal producers and transporting the coal. He said the deal has “significant potential to provide high quality Kentucky and West Virginia coal to India for years.”
RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at firstname.lastname@example.org. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.