Walter Energy Capitulates on Building New Coal Export Terminal in Mobile

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Birmingham Company Agrees to Sell Property to Alabama State Docks

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Water jets wet down a coal pile at the McDuffie Coal Terminal next to the proposed new one: Walter Simon

By Glynn Wilson

In an unusual turnaround from its ambition to build a new coal handling export terminal along the riverfront in Mobile, Alabama, Walter Energy has reached an agreement “in principle” with the State Port Authority to sell both the Blue Creek terminal in the Port of Mobile and an additional 60 acres less than a mile from the proposed site of the Blue Creek terminal for $25 million.

After making an impassioned plea for approval to build a new coal handling export terminal on the site before the Mobile City Council on April 22, and after the council delayed the vote for two weeks to further consider the issue, the council was scheduled to vote on the proposal on Tuesday, May 6.

We wrote more about the plan on April 26, and on May 2, the Birmingham based company put out a press release announcing the agreement to sell the land to the State Docks.

In addition to the land sale, the company has agreed with the State Port Authority to amend the terms of its coal handling agreement in force to handle the company’s coal exports through the existing McDuffie Coal Terminal.

“As part of the amendment, the Port Authority has agreed to a long term extension of the existing coal handling agreement and to make certain improvements to the McDuffie terminal to ensure the company has the capability to export the coal that will be produced when the company’s Blue Creek Mine is completed,” the company said in the press release. “It is anticipated that the transactions will be consummated upon the satisfaction of usual and customary closing conditions.”

James K. “Jimmy” Lyons, director and chief executive officer of the Alabama State Port Authority who played a starring role in the Mobile City Council meeting seeking approval for Walter Energy’s coal terminal, praised the deal as key to the authority’s growth and said the money to buy the land will come from Port Authority profits, not state taxpayer money.

“Strategically, these acquisitions will help us expand our container business,” Lyons said.

The purchase would include the 35 acre former Mobile River terminal tract and the 63 acre former Armstrong tract, both located adjacent to the authority’s Choctaw Point Complex.

During a Port Authority Board of Directors session held on Friday, Lyons reported that the existing Mobile River terminal would support much needed expansion land for its rapidly growing container terminal, while the Armstrong tract provided an additional 63 acres for “warehousing, distribution and light manufacturing applications.”

In reaction to the announcement, Mobile and Alabama Sierra Club officer Carol Adams-Davis said it means no new coal terminal will be constructed.

“It means that there will be no new coal terminal built down the street from schools, churches, businesses and residences,” she said. “This is a victory to stop yet another coal terminal from being built. The work is not over, but this means public pressure and media coverage is effective. We can now focus specifically on (the) McDuffie Island Coal handling facility, and what needs to be done at McDuffie to improve air and water quality.”

“This is a NIMBY victory,” added David Underhill, conservation chair of the Mobile Bay Sierra Club. “Not in my back yard. It moves the dusty coal handling operations to another terminal about a mile further from residential neighborhoods. But it increases the coal export capacity of the port, which increases the climate impacts of burning coal. It does nothing toward switching from coal to other resources for power and steel production. This necessary move will generate many more jobs than coal mining loses.”

The full Walter Energy press release can be seen here.

In reaction to e-mail questioning, Walter Energy’s vice president for communications said the deal with the State Docks eliminates the need for the company to build its own coal export terminal.

“Our objective from the beginning was to ensure that we had adequate throughput capacity at the port to cover our future expansion plans,” Hoffman said. “As our news release indicates, if this proposed transaction is consummated, ASD (which already handles all of our existing coal exports from our Alabama mines) is prepared to provide the additional throughput we will need when our production … levels increase. This would obviate the need to construct our own facility.”

It would also handle the increased export levels, he said, “because virtually all the coal we produce in Central Alabama is exported.”

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The proposed site of a new coal export terminal by Walter Energy: Walter Simon

© 2014, Glynn Wilson. All rights reserved.

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  1 comment for “Walter Energy Capitulates on Building New Coal Export Terminal in Mobile

  1. May 4, 2014 at 8:46 am

    Is exporting Alabama coal a good idea? Or not?

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