[Wildcatk23]

Louisville, Kentucky (Platts)--15Aug2012/448 pm EDT/2048 GMT

Kentucky and West Virginia coal mines will sell 9 million short tons of Central Appalachian steam coal annually to India for 25 years under a $7 billion deal unveiled Wednesday.

A significant portion of the coal will be produced by privately owned Booth Energy, which operates mines in both states, according to Ed Hatfield, president of Cincinnati-based River Trading.

Starting in September, his company will load the coal onto barges at a Big Sandy River dock in eastern Kentucky for shipment to the Gulf of Mexico, where the coal will be placed on oceangoing vessels for the trip to India.

Hatfield said the coal pricing "will be based on market pricing and adjusted."

New Jersey-based FJS Energy LLC signed the long-term coal sales agreement with India's Abhijeet Group. Although India produces coal, domestic production cannot keep up with demand.

Anand Kumar, executive director for Abhijeet, said during a news conference that the partnership "is an example of the strong potential between American producers and Indian customers. We see a significant growth of our mutually rewarding relationship."

Kentucky Governor Steve Beshear, who attended the news conference, termed the deal "a great example of a new market for Kentucky resources."

Beshear, a Democrat, has been a vocal critic of the Obama administration's dealings with the US coal industry.

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