Major news broke as this edition was going to press. Two of America’s leading companies, CONSOL Energy and Arch Resources, have agreed to merge and form Core Natural Resources (see News, p. 6). The transaction won’t be finalized until next year. The logic behind the deal makes sense. Over the years, Arch has successfully positioned itself as a leading met coal producer even though it still operates some great thermal mines in the western U.S. The quality of the Pittsburgh No. 8 seam coal allows CONSOL Energy to sell its product into both thermal and metallurgical markets.
Based on last year’s production data, where Arch produced 75.3 million tons and CONSOL Energy produced 26.4 million tons, Core Natural Resources would have a proforma production of 101.7 million tons. That would not be enough to overtake the top U.S. coal producer, Peabody Energy, which produced 104.3 million tons in 2023, but they would be very close. Navajo Transitional Energy Co. would be a distant No. 3 with 45.7 million tons in 2023, followed by Alliance Resource Partners (34.5 million tons) and American Consolidated Natural Resources (32 million tons).
Those rankings would likely remain the same for 2024. So far this year, the guidance on U.S. production from all three companies is lower than 2023. The bulk of Peabody’s production in the U.S. is thermal coal. CONSOL Energy has guided a little lower, but they may be able to overcome the production losses related to the bridge collapse at the Port of Baltimore. The growth opportunity for Core Natural Resources would likely be the export market until domestic thermal coal consumption regains its momentum, and Arch and CONSOL both operate highly efficient longwall mines with access to ports and terminals.
Speaking of longwall mining, Signal Peak Energy is the cover story for this edition (see Longwall Mining, p 16). Last year at the U.S. Coal Show, Parker Phipps, the company’s CEO, told me about the successful turnaround he and his team had implemented at the Bull Mountains No. 1 mine near Roundup, Montana. A cultural transition has taken place at Signal Peak Energy and the mine is also operating mostly new equipment. They have some federal permitting issues to deal with, but they are mining safely and efficiently with confidence today. Congratulations to the Signal Peak miners!
Enjoy this edition of Coal Age.
