Coal Age Magazine - For more than 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.
Issue link: https://coal.epubxp.com/i/718122
6 www.coalage.com August 2016 news continued to be $103 million. Miller Creek and Fola mining complexes each have 114 million tons of owned and leased coal reserves. The move completes CONSOL Energy's exodus from the Cen- tral Appalachian (CAPP) coal market. The company will have one remaining coal production complex in Pennsylvania with three mines: Bailey, Enlow Fork and Harvey. It expects annual sales from these operations to total 22.5 million to 25.5 million tons. Contura Completes Acquisition, Alpha Names Stetson CEO Contura Energy completed the previously announced acquisition of several core assets from Alpha Natural Resources (ANR), which was a key step for Alpha to emerge from Chapter 11 bankruptcy. Contura will be a private, Tennessee-based company with affili- ate mining operations across multiple major coal basins in Penn- sylvania, Virginia, West Virginia and Wyoming. It also purchased Alpha's interest in the Dominion Terminal Associates coal export terminal in eastern Virginia. Contura will be led by former Alpha CEO Kevin Crutchfield and will have a workforce of more than 2,200 former Alpha employees. The new, reorganized Alpha will be a smaller, privately held com- pany operating 18 mines and eight prep plants in West Virginia and Kentucky. David Stetson, who was appointed CEO of the reorganized company (see People, p. 14), said, "By completing this restructuring, ANR emerges as a company with a solid financial foundation and a strong team to continue to mine and sell coal. We are now also better positioned to satisfy ANR's environmental responsibilities." Alpha and its affiliates will have offices in Julian, West Virgin- ia, and Kingsport, Tennessee, supporting operations at 14 mining complexes in Central Appalachia. Cloud Peak Back in Black for 2Q Despite a year-on-year drop in coal shipments, Cloud Peak En- ergy (CPE), which operates exclusively in Wyoming's Powder Riv- er Basin, reported a respectable $35.3 million net income for the quarter. For the period ended June 30, the company reported total revenue of $174.2 million with 11.9 million tons sold. That is com- pared to $244.1 million in revenue and 16 million tons sold for the comparable 2015 quarter. The company's earnings, released July 28, had some other in- teresting contributors, including $18.8 million (about 97%) of its adjusted earnings coming from revenues from contract buyouts. Additionally, its numbers revealed that export shipments have fall- en for the company from 1.4 million tons in the first quarter of 2015 to 200,000 tons in the first quarter of this year, and now nothing for the second quarter. CPE exported 2.4 million tons in 2015. Despite the mixed-bag quarter, CPE's response to the results was generally positive. "After very low shipments in April and May, we started to see improved shipments in June and are optimistic that this trend will continue during the second half of the year," said CPE President and CEO Colin Marshall. "Our financial per- formance during the quarter benefited from buyouts by three cus- tomers and the impact of reduced reclamation cost assumptions on our asset retirement obligations. Once again, our sites did a very good job of controlling costs during the quarter as we reacted to very low shipments." CPE blamed seaborne thermal coal's continued weak intern- tional prices for its flattened exports. "We have begun to see stabil- ity in international supply and demand and a significant increase China's Second Largest Coal Producer Sees Profits Rise China Coal Energy Co. Ltd., the country's second largest coal producer, re- China Coal Energy Co. Ltd., the country's second largest coal producer, re- ported increased profits for the first half of this year, according to Xinhua. ported increased profits for the first half of this year, according to Xinhua. The company estimated its net profit at 350 million yuan ($52.4 mil- lion), a remarkable turnaround considering that in 2015 H1, the company suffered a loss of 965 million yuan ($144 million). The state-owned coal firm attributed the turnaround to more rational production management, cost reduction, assets sales and coal price rises. India Exports Coal Marking its maiden venture into coal exports, India was expected to ship Marking its maiden venture into coal exports, India was expected to ship around 10 million metric tons (mt) to neighboring countries to tackle the problem of surplus dry fuel in the country. Coal India Ltd. (CIL) is talking to problem of surplus dry fuel in the country. Coal India Ltd. (CIL) is talking to problem of surplus dry fuel in the country. Coal India Ltd. (CIL) is talking to possible customers in Bangladesh, Nepal and Sri Lanka, as first steps to gradually ramp up shipments from the estimated 10 million mt likely to be achieved in the current fiscal year. While shipping coal to neighboring countries was the most obvious choice to mark India's entry into coal exports in the short term, domestic coal miners to mark India's entry into coal exports in the short term, domestic coal miners to mark India's entry into coal exports in the short term, domestic coal miners to mark India's entry into coal exports in the short term, domestic coal miners led by CIL would have to draw up medium- and short-term strategies to make led by CIL would have to draw up medium- and short-term strategies to make its presence felt in international coal markets, as in the long term, a steady presence in overseas markets would be key to efficient stock management. presence in overseas markets would be key to efficient stock management. Stock management would be an important aspect for the country in Stock management would be an important aspect for the country in Stock management would be an important aspect for the country in achieving the target of 1-billion-tpy production over the next four years, a senior government official said pointing out that domestic demands, too, senior government official said pointing out that domestic demands, too, were increasingly cyclical. While over the past four months, CIL has been able to reduce its pit- head stocks from an all-time high of 50 million tons to levels of 43 million tons in June, incentivizing domestic consumers to increase off-take in the midst of falling demand for electricity would only have a very limited im- midst of falling demand for electricity would only have a very limited im- pact on stock management in the medium term. Apollo Top Suitor for Anglo's Australian Assets A team of players driven by private equity group Apollo Global Management are reportedly at the front of the race for more than $1.5 billion in Anglo are reportedly at the front of the race for more than $1.5 billion in Anglo American's coal assets in Australia. According to a Reuters report that cit- American's coal assets in Australia. According to a Reuters report that cit- ed two unnamed sources, Apollo, which has teamed up with fellow equity firm Riverstone Holdings and coal exporter Xcoal Energy and Resources, is firm Riverstone Holdings and coal exporter Xcoal Energy and Resources, is finalizing the details of the deal for the Moranbah and Grosvenor metallur- gical complexes in Queensland's Bowen Basin. Anglo first said in February that it was holding discussions regarding Anglo first said in February that it was holding discussions regarding the divestiture of the assets as part of a $3 billion to $4 billion plan to cut the divestiture of the assets as part of a $3 billion to $4 billion plan to cut down its portfolio in order to reduce its debt amid the market slump. A down its portfolio in order to reduce its debt amid the market slump. A number of potential buyers have made their way in and out of the rumor mill since then, including Glencore and BHP. The group has not yet entered exclusive talks but could sign a deal within weeks, the anonymous sources told Reuters. Anglo has not publicly commented on any potential deal, saying the sale process is ongoing. South Africa's Kangala Breaks Production Record Universal Coal, a South African coal operator, said its Kangala operation in the Witbank coalfield, which completed its pit reconfiguration project last quarter, has hit a record 1.04 million metric tons (mt) of run-of-mine last quarter, has hit a record 1.04 million metric tons (mt) of run-of-mine (ROM) production, a 47% year-over-year increase and was a 35% increase over the previous quarter. Total coal sales were also up quarter-on-quarter, over the previous quarter. Total coal sales were also up quarter-on-quarter, over the previous quarter. Total coal sales were also up quarter-on-quarter, over the previous quarter. Total coal sales were also up quarter-on-quarter, coming in 39% higher than the previous quarter at about 609,000 tons (up coming in 39% higher than the previous quarter at about 609,000 tons (up 20% versus the same period in 2015). Whole-year, Kangala produced more than 3 million mt, and sold more than 2 million mt. "Having concluded the pit reconfiguration, Kangala is now firing on all cylinders and delivering record production in the process. We anticipate Continued from p. 5... Continued on p. 8...