Coal news and updates

US Coal Miners Prioritize Metallurgical Coal Projects Amid High Demand and Favorable Prices

Metallurgical coal, also known as met and coking coal, is a naturally occurring sedimentary rock found within the earth's crust. Met coal encompasses a wide range of quality grades including hard coking coal, semi-hard coking-coal, semi-soft coking coal and pulverized coal for injection (PCI)

High-demand and good prices for metallurgical coal are making U.S. coal miners eager to expand. Metallurgical coal is key for making steel. More U.S. companies are focusing on it because demand for thermal coal, used to generate electricity, is going down. Many big U.S. coal companies are now investing more in metallurgical coal projects.

Throughout the last quarter of last year and continuing this year, the price of Atlantic metallurgical coal stayed steady. The main reason for this stability is a limit on supplies, according to data from S&P Global Commodity Insights. Even though the price for U.S. East Coast Low Vol Hard Coking Coal dropped from $525/mt in March 2022, it's still at a solid $262/mt as of February 15.

Regarding expansion, Warrior Met Coal invested $127.8 million in its Blue Creek project in the last quarter. The total invested in the project for 2023 is $319.1 million. The company plans to spend an extra $325 million to $375 million in 2024. The project started again in May 2022 after a labor strike, COVID-19, and unfavorable market conditions caused delays.

Based on its Q4 2023 earnings report, Consol Energy from Pennsylvania plans to increase production at the Itmann Complex. The company first announced the complex development in 2019, calling it their "next phase." But, a decrease in coal demand led to cuts in spending and production in 2020.

Arch Resources is also looking to increase production at its Leer South metallurgical coal mine. The company plans to develop a second longwall district later this year.

Meanwhile, St. Louis-based Peabody Energy has started longwall production at their Shoal Creek mine earlier than planned. Peabody bought the Alabama mine from Drummond in 2018 for $387 million.

Other big U.S. metallurgical coal producers include Alpha Metallurgical Resources. In Q3 of 2023, Alpha announced the closing of its last thermal coal mine. Ramaco Resources Inc., another U.S. metallurgical coal producer, has not announced when it will release its fourth-quarter earnings.