Pennsylvania’s coal industry has landed a significant overseas contract, a deal that is keeping a regional freight railroad busy.
Latrobe-based Xcoal Energy and Resources has struck a deal to ship 700,000 tons of coal to Ukraine by the end of 2017. The move will help the Eastern European nation generate power over the winter as it struggles to get fuel from pro-Russia separatist-held regions in the east, Reuters reported.
Half of the tonnage will come from mines served by the Schuylkill County-based Reading and Northern Railroad. The carrier will be supplying cars to load the anthracite coal at six points in eastern Pennsylvania.
It was not immediately clear where the rest of the the coal will come from.
The loaded cars will then be transferred to Norfolk Southern Co. trains in Reading. From there they will be hauled to the Port of Baltimore, where coal will be loaded onto ships for the ocean voyage to Ukraine.
A Washington Post report said Xcoal’s deal with Ukraine could be worth as much as $79 million.
“Reading and Northern is delighted to be partnering with Xcoal and Norfolk Southern on this wonderful opportunity,” railroad CEO Andrew Muller Jr. said.
“Our years of investment in coal cars and our branch line rail system pays off with our ability to turn on a dime,” Muller said of the railroad’s capacity to meet the request.
The fuel remains an important source of revenue and traffic for railroads in the state.
As a July Business Journal feature pointed out, more than 255,000 carloads of the fuel started their journeys in Pennsylvania in 2015, or 23 percent of all the state’s originating traffic for that year.