Warrior Met said it started continuous miner development on the first longwall panel at its Blue Creek growth project, producing the first development tons (39,000 tons). The company also said that during Q3 2024 it completed the installation of the service cage, slope belt, slope car and raw coal belt at Blue Creek, and made significant progress on the prep plant, the overland clean coal belt and the rail and barge loadouts. The prep plant is expected to be completed in the middle of 2025 with the longwall starting in Q2 2026.
So far, Warrior Met has invested $612.4 million in the Blue Creek project. More recently, however, demand for met coal has softened and the prices for premium metallurgical coals have declined 12.5 %.
“During the third quarter, high-quality steelmaking coal prices reached a three-year low primarily driven by a confluence of weaker demand, excess Chinese steel exports into our customers’ markets, and ample supply of steelmaking coals,” said Walt Scheller, CEO of Warrior. “We believe that current prices are below the global cost curve and are not sustainable.
“Despite the external factors impacting our results, Q3 2024 represented a significant and positive milestone for Warrior Met as we produced the first development tons from our world-class Blue Creek growth project, on time and within budget,” he continued.
With the addition of Blue Creek, Warrior expects to increase its annual High Vol A production by 4.8 million tons. The company said it will enhance its already advantageous position on the global cost curve; drive its cash costs further into the first quartile globally; improve its profitability and cash flow generation; and cement its position as a leading pure play steelmaking coal producer.
Warrior Met’s sales volume for Q3 2024 was 1.9 million tons compared to 2.3 million tons in Q3 2023. “This 17.5% decrease in sales volume was driven by us being selective with spot sales and exercising patience while we wait for market conditions to improve,” Scheller said.
The timing of a scheduled longwall move in Q3 2024 slipped to early Q4 2024. Inventory levels increased to 915,000 tons as of September 30, 2024. The company re-affirmed 2024 coal sales guidance of 7.4 – 8.2 million tons.
