RYAN ANNOUNCES $11.6 MILLION IN COAL INFRASTRUCTURE GRANTS

Press Release - Monday, May 01, 2000

p>SPRINGFIELD -- Governor George H. Ryan today announced 26 grants, worth nearly $11.6 million, to improve coal production and transportation systems in Illinois.

The grants are expected to leverage $74 million in private spending for equipment upgrades, facility expansions, road improvements, and other infrastructure investments aimed at improving the quality of Illinois coal and making it more cost competitive.

"The Illinois coal industry is an essential part of the Illinois economy, especially in the southern portions of the state," Ryan said. "This program provides the incentives needed to rebuild the industry for today's marketplace."

The Illinois Coal Infrastructure Program is operated by the Department of Commerce and Community Affairs' (DCCA) Office of Coal Development and Marketing. With this announcement, more than $33 million in state funds have been committed to the Illinois Coal Infrastructure Program since the program began in Fiscal Year 1997. The coal grants awarded to date have leveraged $200 million in private investment by Illinois coal producers, transporters and loading terminals.

"The Coal Infrastructure Program has been successful in encouraging coal producers and support industries to reinvest in Illinois," DCCA Director Pam McDonough said. "This is just one more example of how we're working with the private sector to create new economic opportunities and jobs in Illinois."

A list of grant recipients is attached.

COAL INFRASTRUCTURE PROGRAM GRANT RECIPIENTS

American Coal Company
Saline County

• A grant of $900,000 to construct a channel crossing to allow expansion of the Galatia Mine into a new reserve area. This project will extend the life of the mine by 10 to 15 years.

Arclar Company
Saline County

• A grant of $885,000 to construct a new central preparation plant at the Big Ridge Mine that will increase capacity by 33 percent, provide higher coal recovery rates and reduce overall production costs.

Black Beauty Coal Company
Vermilion County

• A grant of $700,000 to install new coal processing and handling equipment for the planned Riola #2 Mine. Additionally, a 110 car rail loop will be installed to service the mine. This project will create 200 jobs.

City of Springfield, Dept. of Public Utilities
Sangamon County

• A grant of $241,000 to make repairs and improvements to the coal handling system and pollution control equipment at the Lakeside and Dallman power stations.

• A grant of $80,410 to install a limestone blending system at the Lakeside Power Station. This system is needed to meet sulfur dioxide emissions limits while burning medium-sulfur coal.

Consolidation Coal Company
Jefferson County

• A grant of $900,000 to increase the east longwall capacity and reduce future development costs at the Rend Lake Mine. This upgrade will increase production by 90,000 tons per year while reducing annual mining costs by $450,000.

Freeman United Coal Mining Co.
Macoupin County

• A grant of $900,000 to open a new area of its Crown III Mine located near Farmersville, Illinois. This project will create 26 new jobs and increase production at the Crown III Mine by 600,000 tons per year.

Heartland Energy, LLC
Perry & Jackson Counties

• A grant of $656,000 to assist with the development of the new Razorback II Mine near DuQuoin, Illinois. This project will create 18 mining jobs and 15 trucking jobs.

Jader Aggregates Group, LLC
Franklin County

• A grant of $500,000 to construct a planned coal recovery operation near Equality, Illinois. Twelve jobs will be created.

Kinder Morgan Energy Partners
Jackson County

• A grant of $150,000 to increase coal blending accuracy and capacity at the Cora Coal Terminal. This project will result in $250,000 in local construction jobs and $1.25 million in purchases of Illinois-manufactured equipment.

Knight Hawk Coal, LLC
Randolph County

• A grant of $500,000 to develop a planned fine coal and slurry recovery operation at the Zeigler #11 Mine and its central cleaning plant. This project will create 13 new jobs, increase production by 280,000 tons per year, and reduce slurry disposal at the mine.

Monterey Coal Company
Macoupin County

• A grant of $154,000 to rehabilitate roof support along conveyor belt entries at the Monterey No. 1 Mine. This project will eliminate a pending risk of a roof fall on the beltline bringing coal to the surface.

• A grant of $479,000 to rebuild and upgrade longwall mining equipment at the Monterey No. 1 Mine. This project will improve the reliability and productivity while reducing overall mining costs per ton.

Old Ben Coal Company
Randolph County

• A grant of $525,000 to make preparation plant modifications that will increase plant yield by 2.3 percent and 92,000 tons/year.

Sugar Camp Coal, LLC
Gallatin County

• A grant of $154,000 for preparation plant modifications that will optimize the coal recovery rate at the Eagle Valley Mine, improve quality, increase output and reduce the quantity of refuse for disposal.

• A grant of $800,000 for a planned expansion of coal handling and preparation facilities at the Wildcat Hills Mine. This project will extend the life of the mine and create approximately 110 mine-related jobs.

Turris Coal Company
Logan/Sangamon Counties

• Three grants totaling $500,000 for the planned purchase and installation of slope conveyor and overland conveyor systems to transport raw coal from new material handling site to the Elkhart preparation plant. Installation of the belt eliminates the need for trucking approximately 3.6 million tons of raw coal through neighboring towns. These projects support ongoing infrastructure improvements at the mine to extend the life of the mine, increase mine production by 1.3 million tons per year, and reduce mining costs by 10 percent.

• A grant of $400,000 for equipment for a fourth mining unit at the Elkhart Mine. The fourth unit will add 40 jobs and increase production by 700,000 tons.

Vigo Coal Company, Inc.
Wabash County

• A grant of $900,000 to assist with the planned startup of the new Friendsville Mine in Wabash County. This new mine will produce 800,000 tons per year and employ 38 miners.

Wabash Mine Holding Company
Wabash County

• A grant of $102,400 to rehabilitate roofs along belt and haulage entries at the Wabash Mine.

• A grant of $12,000 to make preparation plant modifications at the Wabash Mine that will increase the plant yield by 2 to 5 percent.
• Two grants totaling $239,600 to repair or replace key equipment at the Wabash Mine that will result in productivity improvements.

White County Coal Corporation
White County

• A grant of $950,000 to develop new production and support portals serving the Pattiki Mine. This project will expand the coal reserve base by 71 million tons and extend the life of the mine by 20 years.