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|The use of medium-to-high sulfur coals has been negatively impacted by the 1990 Clean Air Act Amendment (CAAA). In this article, a method is demonstrated that can render these coals competitive and yet compliant with Phase II of CAAA. The method uses strategic mining and optimized preparation plant operation to minimize production costs, and it utilizes advanced coal-cleaning technology and an SO2 allowance to produce a compliant coal. The method is illustrated through an example from southern Illinois. For an annual production of 3.2 Mt (3.5 million st) and with a $150/st SO2 allowance cost, it was possible to produce a competitive coal for $0.84/million Btu. The production and allowance costs were $0.608/million Btu and $0.232/million Btu, respectively.|