Kentucky, W.Va., To Ship Coal To India For 25 Years

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Record low natural gas prices and a warm winter have the coal industry suffering through a tough year. But in India, there is a huge demand for coal. The governor of Kentucky has announced a $7 billion deal that ships coal from Kentucky and West Virginia to India for the next 25 years.

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The U.S. coal industry is getting a boost. Nine million tons of American coal will be sent overseas to India this year, and for the next 25 years - it's the result of a new $7 billion deal signed yesterday between an Indian coal group and several producers in Kentucky and West Virginia.

Erica Peterson of member station WFPL has more.

ERICA PETERSON, BYLINE: It's been a bad year for coal. Record-low natural gas prices, a warm winter and environmental regulations on the horizon have led to decreased production and layoffs in the eastern Kentucky coalfields.

But in India, there's a huge demand for coal. The country just had a record blackout - where 600 million people were without power for more than day.

Now, a company called the Abhijeet Group is looking to stockpile Appalachian coal for use in those power plants.

Kentucky Governor Steve Beshear sounded optimistic when he announced the private partnership.

GOVERNOR STEVE BESHEAR: This is a good first step, with the possibility for a lot of growth.

PETERSON: Sending coal to India isn't new for American producers - 1.5 million tons were shipped to India in the first three months of this year. But even so...

JAMES STEVENSON: Absolutely. Yeah. This is a huge deal for the Appalachian basin.

PETERSON: James Stevenson is an energy analyst with IHS Global Insight. He says this new deal will help Appalachian coal producers make up some of the market share they've lost in the past decade, but Stevenson says it's not enough.

STEVENSON: You've lost sort of 50, 60 million tons of production. You know, this is nine million, obviously that's a small percentage of that.

PETERSON: But with the way global trades work, there's a chance this contract could pave the way for other deals between Appalachian coal producers and India.

For NPR News, I'm Erica Peterson in Louisville, Kentucky.

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