Alcoa, Vigo proceed with Friendsville mine

Alcoa, Vigo proceed with Friendsville mine

Washington (Platts)--13Jun2005


Alcoa Aluminum and Vigo Coal are pushing forward with development of the new
Friendsville coal mine in southeastern Illinois despite having their request
for an enterprise zone expansion rejected earlier this week by the Wabash
County Board.

The Pittsburgh, Pa.-based aluminum company is sinking about $45-mil into the
mine, company spokeswoman Sally Rideout Lambert told Platts Coal Trader
Thursday. The partnership with Vigo marks the first time Alcoa's Warrick
operations near Newburgh, Ind., has participated in a mine ownership project
outside of Indiana.

Alcoa once was involved with Peabody Coal in the Squaw Creek surface mine near
Boonville in Warrick County. Squaw Creek has been closed for years.

The Wabash County Board turned down a request to extend an enterprise zone
designation to the mine, saying it lacked sufficient information about the
project. An enterprise zone would provide tax breaks to the mine developers
and is "very important" to the project, Lambert said.

However, she said Alcoa has no intention of pulling out of the venture with
Vigo and is "still talking with the elected officials so they can have all the
information they want."

The new surface mine has produced some developmental coal and is not expected
to be in actual production until July 2006, Lambert said. The mine would ship
about 1-mil t/yr of high-sulfur coal to Alcoa's Warrick coal-fired power plant
near the company's aluminum smelter and rolling mill at Newburgh.

Vigo officials could not be reached for comment.

This story was originally published in Platts Coal Trader
http://www.coaltrader.platts.com

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