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The status of Seward's coal terminal, owned by the state and Hyundai Merchant Marine Co. Ltd., is still unclear after Usibelli Coal Mine Inc. lost its valuable export contract to South Korea.
Officials from Hyundai and its subsidiary operator at the facility, Suneel Alaska, did not return phone calls from the Journal of Commerce.
The South Korean-owned company also has not been in contact with the state, which seven years ago invested $6.9 million in the facility.
The Alaska Industrial Development and Export Authority made the investment to help lower the costs of the operation. Hyundai still owes $5.6 million on the loan, said Jim McMillan, AIDEA's acting director and deputy director for credit.
"We have had no notification of anything," McMillan said.
Hyundai is current with payments on the loan, which is due in 2005, he said.
"Financially, we don't feel at risk," McMillan said.
While AIDEA might be breathing easy over its ability to get its money back, the Alaska Railroad is choking on the loss of millions of dollars.
The state-owned railroad in September hauled its last load of coal from Healy to the Port of Seward, marking an end to an 18-year relationship that provided millions in revenues for the railroad.
The state-owned railroad's revenues will be slashed by some $4 million annually, according to Patrick Flynn, railroad spokesman. The railroad also will lose about $230,000 on land it leases to the South Korean company for the operation, Flynn said.
The company is current with its lease payments to the railroad, Flynn said.
Hyundai also has kept its dozen employees in the dark over the future of the coal terminal, said Shelli Knopik, terminal office manager in Seward.
"It's limbo land," Knopik said. "Some people are looking for new jobs."
The coal terminal will be used as a gravel-loading facility for at least one barge to the Aleutians sometime in early November, Knopik said.
Usibelli announced in late March that it couldn't renew Hyundai's South Korean coal export contract, which represents nearly half its 1.5 million ton annual production. The company has shipped some 12 million tons of coal to South Korea since 1984 and has been the only mine in the United States exporting coal to the country.
The mining company has laid off a third of its 120-person work force since spring.
Usibelli in January was underbid by two coal suppliers in Indonesia, which has grown from being virtually a non player in the world export coal market 20 years ago to the third largest today.
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