Total Q3 2022 revenues for Alliance Resources Partners (ARLP), increased 51.3% to a record $628.4 million compared to $415.4 million for Q3 2021 as a result of significantly higher coal sales revenues, which rose $188.3 million to $550.6 million. Coal sales revenues increased on the strength of record coal sales prices, which rose 40.5% in Q3 2022 to $59.94/ton sold, and increased coal sales volumes, which were 8.1% higher compared to Q3 2021.
“Higher coal sales and production volumes, combined with record per-ton price realizations, drove our total Coal Segment Adjusted EBITDA up 77.8% to $224.6 million as margins per ton sold jumped $9.58 compared to Q3 2021,” said Joe Craft, chairman, president and CEO for ARLP. “We were also able to execute new coal sales commitments for delivery of 5.6 million tons through 2025 at prices supporting higher margins in the future.”
During Q3 2022, ARLP sold 6.1 million tons of Illinois Basin (ILB) coal and 3.1 million tons of Appalachian coal, which compares to 5.8 million tons of ILB coal and 2.7 million tons of Appalachian coal in Q3 2021.
ALRP completed longwall moves at the Hamilton and Tunnel Ridge mines during Q3 2022. For its ILB segment, the company reported increased sales volumes, lower roof support expenses, and higher recoveries at its Gibson South and Hamilton mines. The company reported increased costs for its Appalachian segment as a result of adverse mining conditions and prep plant maintenance improvements at MC Mining, higher labor-related expenses, and supply costs. These increases were partially offset by lower sales-related expenses due to decreased price realizations and increased recoveries at the Mettiki and Tunnel Ridge mines.
“ARLP is on track to achieve record financial results in 2022,” Craft said. “Since we have not seen a meaningful supply response, we expect the global energy markets will continue to be favorable for the foreseeable future. Based upon this view and our current contracted coal sales volumes, we expect to add up to 2 million tons of ILB production next year..
“To enhance our long-lived, efficient mining operations and to maximize cash flow from our existing coal assets, we recently committed to access a resource area containing
approximately 110 million tons adjacent to our River View mine, allowing us to produce from a more productive, higher yield coal seam area and capture the opportunity to fully utilize existing infrastructure at this operation,” Craft said. “In addition, during Q3 2022, we added 69 million tons of lower-cost, lower-sulfur coal adjacent to our low cost Tunnel Ridge longwall mine. We expect both of these investments will payout on cost savings alone and also give us the
opportunity to add tons beyond 2024 to meet market demand, if available.”
