Slow economy, slumping prices for natural gas delay coal proje

Saturday, January 26, 2002

CARBONDALE, Ill. -- The slow economy will delay plans by Arch Coal Inc. to build a $1 billion coal-fed power plant near this southwestern Illinois city, company officials and local organizers said Friday.

The St. Louis-based company, which owns 300 million tons of reserves in Southern Illinois, has met with utility companies, power generators and other prospective partners to build and run the plant near Pinckneyville, Arch spokeswoman Kim Link said.

But the stalled economy has slowed new projects such companies are already committed to, making them more hesitant to sign on to the planned power station, Link said.

"They're still showing interest, but they're not as aggressive as they would have been last fall," Link said. "The project has slowed a bit, but it's still definitely viable and we're still diligently going forward."

Arch has not yet applied for state air-quality permits and is not in the final stages of negotiations with a prospective partner, Link said. Permitting usually takes six to nine months.

In contrast, Peabody Coal applied in October for state permits for its proposed 1,500-megawatt power plant near Lively Grove, 50 miles southeast of St. Louis, said company spokesman Vic Svec. Peabody hasn't found a partner for that project, either, he said.

But the economic slowdown hasn't affected Peabody's plans, which don't call for the plant to be operating before 2006 or 2007, Svec said.

Arch executives and Pinckneyville officials in May announced plans for a mine-mouth plant, which has an electricity generator atop the coal mine.

City officials said at the time that the new plant should be providing hundreds of new jobs within three or four years to an area hit hard by the collapse of the state's coal industry in the 1990s.

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