US Coal Exports Bound for Japan's New Power Plants

U.S. miner Cloud Peak Energy said on Tuesday it will export coal from a Montana mine for 30 to 40 months to two new power plants in Japan with shipments that could start late next year.

The coal from Montana's Spring Creek Mine will be carried by rail to Vancouver and then sent by ship for delivery to two 540-megawatt coal gasification plants in Fukushima Prefecture, Cloud Peak said. JERA Trading Pte Ltd, a trading company based in Singapore, will buy the coal from Cloud Peak.

Sales of the coal are expected to reach 1 million metric tonnes in the final contract year, Cloud Peak said.

The deal represents a bit of good news for a U.S. industry that has seen production slip to the lowest level since the late 1970s in the face of a glut of competing low-cost natural gas.

Backers of coal gasification say the plants burn coal more efficiently than conventional plants, emitting less of the greenhouse gas carbon dioxide.

"If similar plants were to be built in the U.S. it would go a long way to addressing concerns about carbon dioxide emissions while providing low-cost, reliable electricity," said Colin Marshall, chief executive and president of Cloud Peak.