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/987749
8 www.coalage.com May 2018 news continued during peak weather events while delivering consistent volume and pricing performance at other times," Brock said. For the quarter, other costs increased by $8 million compared to the year-ago quarter, including approximately $4.8 million in demurrage expense created by the above-mentioned rail and port logistical challenges as well as an increase in costs related to ex- ternally purchased coal for blending purposes. Performance targets for coal sales volumes are projected at between 26.2 million to 27.2 million tons. Capital expenditures are projected between $125 million and $145 million. American Resources Acquires More Mines, Equipment Through its Quest Energy and McCoy Elkhorn Coal subsidiaries, American Resources Corp. recently announced it has purchased coal mining assets in Phelps and Floyd counties in Kentucky. The company has also secured additional equipment to support its mining operations. American Resources purchased coal assets from Empire Coal Processing, including the currently operating PointRock surface mine in Phelps, Kentucky. Under the agreement, McCoy Elkhorn Coal will immediately assume operational control of the Poin- tRock mine as well as the associated leases, permits, government approvals, reclamation bonds and equipment. American Resources said it will integrate the PointRock sur- face mine into its McCoy Elkhorn Coal subsidiary to be managed by Quest Energy's Surface Operations Team, using their opera- tional expertise. Management plans on using surface, auger and highwall-mining methods to access various coal seams, including the Pond Creek, Upper Alma, Lower Alma and Cedar Grove, all of which have excellent metallurgical characteristics and are well- known within the met coal market. "We're excited to be adding PointRock to our portfolio of high-quality coal mines and strategically it makes a lot of sense," said Thomas Sauve, president of American Resources. "Given its close proximity to McCoy Elkhorn Coal and that PointRock has been operated as a stand-alone mining operation, we are con- fi dent that by implementing our operating philosophy with the support of our processing and transportation infrastructure, we will be able to materially improve the operational effi ciencies and profi tability at PointRock." "The added volume of High-Vol A and B coal qualities will enable us to increase our metallurgical coal sales and help fulfi ll some of our customers' demand at McCoy Elkhorn, while allow- ing us to expand our operating margins," Sauve said. Production from the PointRock mine will be trucked to Mc- Coy Elkhorn's Bevins prep plant and rail loadout facility, enhanc- ing American Resources' coal-blending capabilities and sales vol- ume from its McCoy Elkhorn subsidiary. American Resources also acquired an active surface mining operation focused on remining a coarse disposal area in Wayland, Floyd County, Kentucky. Under the agreement, Knott County Coal will immediately assume ownership of all permits, leases, govern- ment approvals, and reclamation bonds associated with the Way- land, Kentucky, refuse area. The Wayland site dates back to when the Elk Horn Coal Corp. established the coal camp town of Wayland in 1913, where they operated several mines up until the mid-1950s. Decades ago, coal and CEO Glenn Kellow was quoted as saying. He said global miners like Peabody were benefi tting by locking themselves into fi xed-price agreements for selling coal to India, among other countries. Ukraine's Metinvest Refinances Debt During late April, Metinvest, the vertically integrated steel and mining group of companies based in Kiev, Ukraine, refi nanced its $2.3 billion of debt, by issuing two tranches of bonds and amend- ing and restating its pre-export fi nance (PXF) facility. As a result, Metinvest issued $1.6 billion in new bonds and secured $765 mil- lion in the PXF facility. New incremental proceeds from the com- bined transaction amounted to approximately $205 million. "With this landmark transaction completed, we can focus on growing our business through the implementation of our Technological Strategy to 2030, which we believe will make us even more resilient and competitive," said Yuriy Ryzhenkov, CEO of Metinvest Group. Notably, the bond issue is Metinvest's largest to date, with its lowest-ever coupon and longest maturity. It is also the most size- able issuance by a Ukrainian corporate. The deal received strong support from the global investor community and top European fi - nancial institutions. Ukrainian Spends More for Imported Coal From January to April, the value of Ukraine's coal imports increased by 30%, to more than $1 billion, compared to the same period one year ago, according to Economic Unian. According to the latest gov- ernment stats, 7.4 million metric tons (mt) of coal have been im- ported. The largest suppliers remain Russia, the U.S., and Canada. Import of coal from Russia in monetary terms in January-April reached $643.6 million (64%), imports from the U.S. accounted for $288.4 million (28.7%), and from Canada they stood at $48.4 mil- lion (4.8%). The production of thermal and coking coal in Ukraine in 2017 shrank by 14.6% against 2016, to just shy of 35 million mt. The hostilities in eastern Ukraine, which began in 2014, have caused a signifi cant shortage of coal, primarily that of thermal anthracite group produced in militant-controlled areas of Donetsk and Lu- hansk regions. Due to this, Ukraine started buying coal abroad. Teck Ships Less Met Coal in the First Quarter Canadian miner Teck Resources said its fi rst quarter production and sales volumes for its metallurgical coal operations were nega- tively by logistical issues at Westshore Terminals. Orders from cus- tomers were in place to exceed the company's original sales guid- ance of 6.3 to 6.5 million metric tons (mt). As a result, clean coal stockpiles at its mines reached high levels, forcing some plants to idle, consequently affecting production. Teck's met coal segment reported a fi rst quarter gross profi t of $816 million compared with $963 million a year ago. Met coal prices averaged US$207/mt in the fi rst quarter, slightly lower than a year ago and the fourth quar- ter of 2017. The company's fi rst quarter sales were 6.1 million mt compared with 5.7 million mt a year ago. According to Teck, the lack of consistent, reliable vessel loading and unloading of Teck trains at Westshore Terminals ultimately resulted in high clean coal stockpiles at the Elk Valley mines. In addition, CN service was below expectations with reported shortages of crews, cars and locomotives through the fi rst quarter resulting in high clean coal inventories at its Cardinal River Operations. Continued from p. 7...