Arch Resources ended its first quarter of 2021 (1Q2021) with a $6 million loss while taking strides to complete its accelerated reclamation plan in the Powder River Basin (PRB), according to a quarterly earnings report released Thursday.
While still a loss, the end of 1Q2021 showcased a $19.3 million improvement over the $25.3 million loss reported for the first quarter of the previous year, an accomplishment the coal giant attributes to the expanding availability of the COVID-19 vaccine and a declining rate of infection across its operations, according to the April 22 report.
“The Arch team maintained its world-class execution in (1Q2021), once again delivering operational excellence in the key areas of cost control, safety, and environmental stewardship,” Paul A. Lang, Arch’s chief executive officer, said in a statement.
This past quarter, Arch’s thermal coal sales came in at 12.3 million tons, about 1.8 million tons less than the amount sold in the final quarter of 2020 (4Q2020), a pattern that the company expects to hold well into the next quarter of 2021 due to still-inflated power plant stockpile levels and low power demand, according to the report.
Earnings from production at Black Thunder, Coal Creek, and the West Elk mines will be used to carry out the coal giant’s long-term accelerated reclamation plan in the PRB, per the report.
“We are methodically harvesting value and cash from our legacy thermal assets while working down our long-term closure obligations in a systemic and measured way,” Lang said in a statement.
The company had previously announced with the release of their 4Q2020 earnings report that it would strive to fulfill existing contracts at Coal Creek Mine throughout 2021 with the intent of closing and reclaiming the mine’s active pit south Gillette in 2022.
This past quarter, Arch spent around $8 million towards retiring Coal Creek Mine and anticipates having 80 percent of the final reclamation and retirement project finished by mid-2022.
Similar plans had been hinted at for Black Thunder Mine in the 4Q2020 earning report, though specific retirement and final reclamation dates have not been released as of April 22.
But in the past few months, nearly $2 million worth of work aimed at shutting down and reclaiming Black Thunder was completed, according to the report.
Systemically shutting down PRB operations aligns with Arch’s strategic shift toward metallurgical products in anticipation of growing steel demands as the global economy intensifies its focus on decarbonization, per the report.
Steel is an important component for urbanization, infrastructure replacement, and the construction of decarbonization tools, according to the report. Those tools could include mass transit systems, wind turbines, and electric vehicles.
“The team’s objective is clear as we drive forward in completing the company’s strategic transition towards steel and metallurgical coal markets while remaining committed to our environmental stewardship across our operations,” Lang said in a statement.