Arch focuses on met coal at appalachian mines - Beckley, Bluefield & Lewisburg News, Weather, Sports

Arch focuses on met coal at Appalachian mines

Posted: Updated:
  • Local NewsLocal NewsMore>>

  • Tazewell County Man Busted for Growing Marijuana

    Tazewell County Man Busted for Growing Marijuana

    Monday, September 1 2014 8:04 PM EDT2014-09-02 00:04:51 GMT
    Roger Lee Sparks, Jr.Roger Lee Sparks, Jr.
    A Richlands man is in custody after Tazewell County Deputies find $350,000 worth of pot, including 115 plants and more than a pound of harvested marijuana, and guns in his home.
    A Richlands man is in custody after Tazewell County Deputies find $350,000 worth of pot, including 115 plants and more than a pound of harvested marijuana, and guns in his home.
  • Officers In Tazewell County Work To Keep Your Holiday Travel Safe

    Officers In Tazewell County Work To Keep Your Holiday Travel Safe

    Monday, September 1 2014 6:50 PM EDT2014-09-01 22:50:12 GMT
    Police patrolling the roads this Labor DayPolice patrolling the roads this Labor Day
    According to AAA, 34.7 million people are expected to hit the road this Labor Day. Many police officers are out in force to keep you safe.
    According to AAA, 34.7 million people are expected to hit the road this Labor Day. Many police officers are out in force to keep you safe.
  • After fatal McDowell County crash, Troopers caution against drinking and driving over Holiday Weekend

    After fatal McDowell County crash, Troopers caution against drinking and driving over Holiday Weekend

    Monday, September 1 2014 6:00 PM EDT2014-09-01 22:00:38 GMT
    While many are safely celebrating Labor Day, State Troopers want to caution everyone about the dangers of drinking and driving.The West Virginia Department of Transportation says over the last 5 years in the Mountain State, almost 800 people have been killed in a drink driving crash just during Labor Day Weekend. Troopers released these pictures from Sunday morning's fatal crash to show the consequences drinking and driving can have.Read full story on Sunday morning's fatal crash in McDowell ...
    While many are safely celebrating Labor Day, State Troopers want to caution everyone about the dangers of drinking and driving.The West Virginia Department of Transportation says over the last 5 years in the Mountain State, almost 800 people have been killed in a drink driving crash just during Labor Day Weekend. Troopers released these pictures from Sunday morning's fatal crash to show the consequences drinking and driving can have.Read full story on Sunday morning's fatal crash in McDowell ...
  • EnergyEnergyMore>>

  • UMWA endorses Tennant at annual Labor Day Celebration in Racine, WV

    UMWA endorses Tennant at annual Labor Day Celebration in Racine, WV

    Monday, September 1 2014 3:49 PM EDT2014-09-01 19:49:35 GMT
    United Mine Workers of America will feature food, entertainment and presentations by political and labor leaders at its 76th Annual Labor Day Celebration in Boone County on Sept. 1.
    United Mine Workers of America will feature food, entertainment and presentations by political and labor leaders at its 76th Annual Labor Day Celebration in Boone County on Sept. 1.
  • Feds want nuclear waste train, but nowhere to go

    Feds want nuclear waste train, but nowhere to go

    Monday, September 1 2014 12:11 PM EDT2014-09-01 16:11:52 GMT
    The tracks were supposed to lead to a depository at Yucca Mountain in Nevada, where Congress intended to send radioactive fuel. Instead, the Obama administration cancelled a project that had been criticized as inadequate and opposed by many Nevadans.
    The tracks were supposed to lead to a depository at Yucca Mountain in Nevada, where Congress intended to send radioactive fuel. Instead, the Obama administration cancelled a project that had been criticized as inadequate and opposed by many Nevadans.
  • WV workforce lacks oil and gas expertise — for now

    WV workforce lacks oil and gas expertise — for now

    Sunday, August 31 2014 5:00 PM EDT2014-08-31 21:00:19 GMT
    Despite the relatively high amount of natural gas production in West Virginia, less than 3 percent of employees in some of the major occupations that make up the sector's workforce live in the Mountain State.
    Despite the relatively high amount of natural gas production in West Virginia, less than 3 percent of employees in some of the major occupations that make up the sector's workforce live in the Mountain State.

Utilities are burning down their stockpiles and will need to replenish them. The export market for metallurgical coal remains uncertain, but a new mine came on line in December.

That's the good news for Arch Coal, one of the largest producers in West Virginia.

The bad news: The rebound could very well benefit regions other than West Virginia.

One Arch Coal official told investment analysts on Feb. 4 that it will be difficult for coal from Central Appalachia (CAPP), which includes southern West Virginia and eastern Kentucky, to compete with natural gas despite the rise in gas prices. Even as the coal market improves, Arch officials expect lower CAPP production this year.

Arch released its fourth-quarter and year-end financial statement before markets opened Feb. 4. The company reported a net loss of $371.2 million in the fourth quarter and $229.2 million for 2013.

When talking with analysts later in the day, Arch's senior managers were bullish on thermal coal from the Powder River Basin and on metallurgical coal from Appalachia, but they were bearish on thermal coal from Appalachia.

Arch also expects natural gas prices to fall this year, lessening CAPP coal's appeal in the utility market, Eaves said.

"So, we continue to see pressure on Central Appalachian thermal coal as we move forward," he said.

Stockpiles at power plants supplied by CAPP coal remain high, but those at plants supplied by Powder River Basin coal are falling to the point that the market for PRB coal should be good this year, Arch executives said.

While Arch is pessimistic about CAPP thermal coal, it is looking forward to production from its Appalachian mines that produce met coal, particularly the new Leer mine in Taylor County.

"The longwall began operating in December, and we are pleased with the ramp-up thus far," Eaves said. "We have invested over $400 million to bring on this mine, which will be the cornerstone of Arch's met coal output for years to come.

"In 2014, we expect the Leer mine to run at a three million ton-a-year pace annualized with roughly 70 percent of that output targeted for the coking coal market. About half of those tons are already committed in the market today."

Arch can produce about 10 million tons of met coal per year, but it will aim for only 8 million tons this year because of market conditions, Eaves said.

"We currently anticipate a challenging environment for the bulk of 2014," he said. "One promising sign is that demand remains reasonably strong. Unfortunately, global supplies outplace that demand, depressing prices.

"Longer term, we do see a bright future for U.S. coal in the international market, but we expect lower metallurgical export volumes in 2014," he said.

Paul A. Lang, Arch's executive vice president and chief operating officer, said the company reduced its cash cost in Appalachia by 4 percent last year while cutting volumes by 20 percent.

"We have been actively realigning our portfolio in the region to concentrate production on our lowest-cost mines and to shift our outputs toward higher-margin metallurgical markets," he said.

Met coal made up about half the tons Arch sold from its Appalachian mines last year. That was up from 2012, and Arch expects met tonnage to be a greater percentage this year, Lang said.