Coal news and updates

In 2019, Contura Energy is expected to ship between 24.6 million st and 26.7 million st of coal across all of its segments, the Bristol, Tennessee-based company said Thursday.

 

Register Now  "Through the completion of our recent merger with Alpha Natural Resources, Contura's operational scale, production flexibility, and experienced workforce combine to create the premier met coal supplier in the US, complemented by a cost-effective eastern thermal coal portfolio," CEO Kevin Crutchfield said in a guidance statement for 2019.

 

Of the total expected shipments in 2019, between 12.2 million st and 12.8 million st will be Central Appalachia (CAPP) metallurgical coal, while 4.6 million-5.2 million st will be CAPP thermal coal.

 

Another 6.8 million-7.2 million st is expected to be Northern Appalachia coal, which is primarily sold into thermal markets.

 

The remaining 1 million-1.5 million st will be metallurgical coal through its Trading and Logistics segment.

 

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In April 2018, the company announced that it was re-merging with Alpha, and it closed the deal in November, which doubled the size of its portfolio to 23 underground mines and nine surface mines.

 

"Contura is well positioned within both domestic and international markets for an active and successful 2019," Crutchfield added.

 

Crutchfield said on a conference call Thursday that "the industry has finally reached a healthy supply and demand balance, which gives us confidence that pricing should remain strong as long as demand remains stable."

 

As of January 7, 40% of the company's anticipated CAPP met production in 2019 is committed to an average price of $123.10/st, while an additional 26% is committed but unpriced.

 

The segment's cost of coal sales per ton is expected to range between $79/st and $83/st.

 

Contura has 81% of its CAPP thermal production committed at an average price of $54.60/st, with 3% committed but unpriced. Average cost of CAPP thermal coal sales is expected between $50/st and $54/st, excluding idle costs.

 

In the NAPP segment, 90% of its expected 2019 production is contracted at an average price of $43.10/st, while 8% is committed but not priced. In 2019, NAPP sales cost estimates are expected to range between $34/st and $37/st.

 

The margin for the Trading and Logistics segment is expected to average between $8/st and $12/st in 2019.

 

Costs related to idle operations are expected between $26 million and $30 million, while SG&A will be between $50 million and $60 million.

 

CFO Andy Eidson said on the call that the company is expecting to move to a new mining district in 2021, which will result in better mining conditions and fewer longwall moves. At the new district, a longwall move will only be needed every 10-12 months instead of twice a year.

 

Contura expects to complete a longwall move in the first and third quarter of 2019, Eidson added.