‘Record Margins’ for Coking Coal, Arch Net Income $72M in 1Q2019
Black Thunder is one of two coal mines owned and operated by Arch Coal in the Powder River Basin.
Despite record flooding hampering Powder River Basin (PRB) operations, things look good for Arch Coal, which came out of 2019’s first quarter with a net income of $72.7 million.
“Arch is out of the gates in excellent fashion in 2019 with yet another strong operating performance,” said Arch Chief Executive Officer John W. Eaves.
Promising figures exhibited by coking coal gave depleting numbers from the Powder River Basin a leg-up, according to Arch President and Chief Operating Officer Paul A. Lang.
“Our coking coal operations performed exceptionally well during the quarter as we captured record per-ton realizations in coking sales,” Lang stated.
He added that coking coal sales showcased a solid cost performance and “record margins,” despite lower shipments.
During 1Q2019, Arch sold approximately 1.8 million tons of coking coal with a per-ton cost of $133.22.
“This strong performance more than offset lower volumes in both our PRB and Colorado operations, where we were adversely affected by widespread rail outages stemming from historic flooding in the Midwest in February and March,” Lang said.
Sales in the PRB were down approximately 13 percent, with sales volumes totaling 17.1 million tons. But despite the low volume levels, the PRB segment maintained an average per-ton cost of $10.98.
Arch believes that requests for PRB coal during 1Q2019 were the highest they’ve been in five years.
Flood related disruptions are expected to persist in the PRB for much of the second quarter (2Q2019), which is historically the lowest-volume quarter of the year, according to Arch Coal.
Regardless, Arch continues to place tons of coal for delivery for the rest of 2019 and years down the road.