Foresight Energy is a leading producer of thermal coal with over 3 billion tons of coal reserves in the Illinois Basin which we have developed with 4 mining complexes. We have recently completed a 5 year, $1.7 billion capital expenditure program constructing these complexes and related transportation infrastructure.
With over 3 billion tons of coal reserves, we believe we are among the largest holders of coal reserves in the United States and our reserves are sufficient to support over 100 years of production at our current production level.
We operate three of the four mining complexes with longwall mining systems. This highly productive mining method coupled with the favorable geology of our coal has resulted in our mines being among the safest, most productive and lowest cost underground coal mines in the United States.
Our four mining complexes (Williamson, Sugar Camp, Hillsboro, and Macoupin) are designed to support up to 8 longwall mining systems, with a combined productive capacity of up to 71.5 million tons of high Btu coal per year. The longwall mining system at our Williamson complex began operations in 2008 and the first longwall mining systems at our Sugar Camp and Hillboro complexes began operating in March and September of this year.
Our reserves and mines are strategically located near multiple rail and river transportation access points giving us multiple transportation options. Our access to competing rail carriers as well as access to truck and barge transport provides us with cost-competitive flexibility. We own a 25 million ton per year barge-loading river terminal on the Ohio River. We have contractual rights to 12 million tons per year of existing terminal capacity in the Gulf of Mexico. These facilities have long-term, fixed price rail contracts.
Our low operating costs, competitive transportation rates and high heat content of our coal enables us to be cost competitive on a delivered cost per Btu to a wide variety of domestic and international markets. We have been exporting coal through New Orleans since 2008 and through September 2012, have exported 14.6 million tons of coal to Europe, South America, India and China.
Chris Cline launched his career in the coal industry in 1980 at the age of 22. Following in the footsteps of his grandfather and father before him, he began working as an underground coal miner in southern West Virginia. He quickly moved into management, where he learned to use unique tools to motivate his workforce to develop and run low-cost coal mining operations. Working proactively with union and union-free operations, Chris Cline’s successes attracted the notice of major coal companies who engaged him to provide contract mining services for their own mines.
In 1985 as his market knowledge deepened and he developed a reputation as a low-cost coal producer, Chris moved the company from its contract mining roots toward developing and operating its own mines, preparation plants, loading docks and coal sales arms. Chris formed his energy development group, the Cline Group, in 1990, and through his front-line experience in each of these disciplines, his proactive approach to mine development and the strength of his workforce and management team, he was able to capitalize on opportunities others missed. The Cline Group was soon recognized across the industry as a reliable coal supplier, an excellent lessee, and a desired employer committed to the health and safety of its miners -- characteristics that continue to drive its success today.
Over the next decade, the Cline Group developed and operated some of the most productive underground coal mines in the country. Its operations in the Appalachian region placed the company among the top 20 coal producers in the United States, with an annual production capacity of approximately 10 million tons. In 2003, the Cline Group sold its mature mining and processing concerns in Appalachia, and concentrated on developing new opportunities in the coal sector.
Faced with rising mining costs and depleted coal reserves in the Appalachian region, the Cline Group shifted its focus to the plentiful coal reserves in the Illinois Basin. The company began acquiring reserves there in 2005, in anticipation of a renewed interest in high sulfur, high Btu coal. Foresight Energy LLC was formed in 2006 to develop and operate the company’s Illinois mining assets. Since that time, Foresight Energy has progressed from undeveloped reserves with zero production to four producing coal mining complexes in central and southern Illinois and a high-volume coal transloading facility on the Ohio River in Indiana and on the Mississippi River in New Orleans.
Our principal owner, Chris Cline began acquiring Illinois Basin coal reserves in the early 2000s’ in anticipation of renewed interest in high sulfur, high BTU coal. Due to the reserve’s favorable geology, Mr. Cline was sure the reserves would be mined someday, perhaps by his grandchildren.
That day came earlier than expected. In 2004 he began permitting the Pond Creek Mine in Williamson County, Illinois. Chris brought Pete Hendrick and his Mach Mining team to Illinois to develop this project. Construction at the mine commenced in early 2005 and the slope construction began in July of that year. Slope development reached the coal seam at a depth of approximately 450 feet in mid-2006 and, following development of the slope bottom, commercial coal production began in November 2006. Longwall mining production commenced in March 2008.
With the successful development and startup of the longwall at Pond Creek, planning began for similar longwall mining operations on other reserve locations controlled by Cline in Franklin County, Illinois, about 12 miles north of Pond Creek. Development of the slope and surface facilities at the MC# 1 Mine began in October 2008. The slope reached the coal seam in January 2010 and first coal shipments occurred in late August 2010. The longwall system began production in the first quarter of 2012.
In January 2009, Cline acquired coal mining assets in Macoupin County, Illinois from ExxonMobil Coal USA. Following the acquisition from Exxon, Macoupin recovered underground equipment, power lines, water pipe, conveyor belt and structure from the prior mine works. Macoupin then sealed off the majority of the previously mined areas of the mine to reduce the size of the underground area it needed to maintain and essentially created a new underground mine. The surface facilities were also upgraded including the rehabilitation of the preparation plant. Coal production began in the third quarter of 2009 with a single continuous miner super-section utilizing battery powered coal haulers. An additional continuous miner unit was added in January 2011 using an FCT system rather than coal haulers.
Construction at the fourth mining complex, the Deer Run Mine in Montgomery County, Illinois began in May 2009. Its slope reached the coal seam in November 2010 and initial coal shipments began in October 2011. Its first longwall mining system started in September 2012.
Other infrastructure to support these four mining complexes was built during this time including nearly 75 miles of rail spurs and rail loading facilities. In August 2011, we acquired control of a 10 million ton per year coal export facility in New Orleans along with committed rail capacity on the CN Railroad. In April 2012 the 25 million tons per year Sitran barge loading terminal on the Ohio River commenced operations.
Riverstone Holdings, LLC, an 18 billion dollar private equity firm specializing in energy and power projects, became a minority owner in September 2007 to help fund and support Foresight’s capital development program.
With an average of over 20 years of coal industry experience per member, the Foresight Energy leadership team has a long and impressive track record of successfully permitting, developing and operating longwall coal mines with industry-leading productivity.
Christopher Cline Principal Strategy Officer
Mr. Cline has more than 30 years of management experience in the coal industry. After attending Marshall University, he entered the coal industry and developed and operated over 25 coal mining, processing and transportation facilities in the Appalachian Region and the Illinois Basin, including some of the most productive longwall mining operations in the country. During the past five years, Mr. Cline has focused his efforts primarily on developing Foresight.
Michael J. Beyer President and Chief Executive Officer
Mr. Beyer had more than 30 years experience in management, operations, finance and acquisitions in coal and other energy-related businesses. Before joining Foresight in 2006, Mr. Beyer served as President of AEP Coal Inc., Vice President of Business Development at Enron Corp., and Senior Vice President and Manager of the Natural Resource Department at PNC Bank. Mr. Beyer received his Masters in Business Administration from Duquesne University and his undergraduate degree in Mining Engineering from Pennsylvania State University.
Oscar A. Martinez Senior Vice President—Chief Financial Officer
Before joining Foresight in August 2011, Mr. Martinez served as Vice President and Treasurer at Cloud Peak Energy, Inc. from 2009 to July 2011. Prior to joining Cloud Peak Energy, Inc., Mr. Martinez worked for Qwest Communications International as Vice President and Assistant Treasurer. Mr. Martinez also held positions in Corporate Strategy and Capital Markets with Qwest Communications International. Prior to joining Qwest, Mr. Martinez worked as an investment banker with JP Morgan Chase and a consultant for Accenture. Mr. Martinez received his Masters in Business Administration from Harvard Business School and his undergraduate degree in Business Administration and Economics from Trinity University.
Christopher Moravec Senior Vice President
Before joining Foresight in June 2012, Mr. Moravec was the president of the Central Appalachian operating subsidiaries of Rhino Resource Partners LP as well as the Executive Vice President of the holding company. During his five-year tenure with Rhino Resources, Mr. Moravec also served on board of directors for Rhino Eastern, a West Virginia based metallurgical coal operation structured as a joint-venture with Patriot Coal Company. Prior to joining Rhino Resource Partners, LP, Mr. Moravec worked for PNC Bank providing both direct and investment banking services exclusively to the coal industry. Mr. Moravec received his undergraduate in Mining Engineering from West Virginia University and a Masters in Business Administration from University of Pittsburgh.
Rashda M. Buttar Senior Vice President—General Counsel and Corporate Secretary
Before joining Foresight in September 2011, Ms. Buttar served as Vice President, Associate General Counsel and Corporate Secretary of Patriot Coal Corporation from 2007 to August 2011. Prior to joining Patriot Coal Corporation, Ms. Buttar served as the Assistant General Counsel and Assistant Corporate Secretary of TALX Corporation from 2003-2007. Ms. Buttar received her Juris Doctor from Saint Louis University School of Law and her undergraduate degree in Russian and European Studies and Political Science from Saint Louis University.
Michael F. Moran President—Sales and Marketing
Mr. Moran joined Foresight in 2005 and now serves as head of Sales and Marketing for Foresight Coal Sales, a subsidiary of Foresight Energy. He has worked in various capacities at the South Carolina Electric and Gas Company and Enron North America's Coal group; served as Director of Origination for Duke Energy and held a similar role with AEP Coal, Inc. Mr. Moran has worked for the Constellation Energy Commodities Group as Director of Sales and Marketing for its coal group. He has served on Board of Directors of the North Carolina Coal Institute and currently serves on numerous committees within that organization. Mr. Moran received his degree in Business Administration from the Citadel.
Kurt Bruenning Vice President—Finance and Treasury
Before joining Foresight, Kurt served as Vice President of Finance Treasury for MEMC Electronic Material, Inc. He also spent 10 years with HD Supply Waterworks, the nation's largest distributor of water and sewer products with sales of $3.5 billion, serving as Vice President of Strategic Business Development and Treasurer.
Serving the communities that support our success.
Because we operate where our employees, vendor and customers live, we believe it is important to take an active role in supporting our local community.
Foresight has partnered with local schools to help improve the quality of life for their students; with programs such as the "weekend warrior" food bags to ensure that elementary school children receive adequate nutrition when not in school. We also sponsored weekly programs to provide children with fresh fruit. To ensure that children are prepared for Illinois' harsh weather, we have donated winter clothing to local elementary schools. In addition, we have sponsored reward programs for local honor students, established reader libraries and provided funding for updated textbooks.
Last winter, Foresight supported several families through St. Louis Crisis Nursery by purchasing needed items for them to have a wonderful holiday. Additionally, we raised and contributed money to assist St. Louis Crisis Nursery in furthering its mission.
To promote community health, safety and spirit, we have funded renovations for local sport facilities and have sponsored teams allowing local youth to participate in baseball, basketball, football, hockey, softball and track. We regularly donate to area hospitals and hospice facilities. Also, we have provided financial support and equipment to local fire departments. And we continue to support the local work of such respected organizations as the YMCA, Big Brothers Big Sisters, the United Way, the American Cancer Society and American Heart Association.
Foresight Energy is also dedicated to improving higher education in mining. We've funded significant improvements in the Coal Mining Technology Department at Rend Lake College in Ina, Illinois, and established a scholarship program for mining engineering students through the Illinois Mining Institute. We also sponsor an internship program to provide mining engineering students with a chance to supplement their education with on-the-job training.