Alpha execs optimistic for 2014 despite lean 2013 - Beckley, Bluefield & Lewisburg News, Weather, Sports

Alpha execs optimistic for 2014 despite lean 2013

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.

Alpha Natural Resources recorded a net loss for 2013, but the company's executives say they expect better markets this year.

In last week's quarterly conference call with analysts, Alpha President Paul Vining described 2013 as "a challenging year" for one of the nation's largest coal producers, but he gave four reasons for optimism:

 

  • Alpha accessed receptive capital and bank markets to extend the maturity of its debt obligations.
  • The company monetized some of its acreage in the Marcellus Shale region.
  • Alpha reduced its operating and overhead cost structure, which could save the company $200 million this year.
  • Alpha met its safety improvement goals, which resulted in a record low rate of reported injuries.

 

Earnings

On Feb. 12, Alpha reported a net loss of $358.8 million in the fourth quarter of 2013 and a net loss of $1.1 billion for the full year. Those compare with net losses of $127.6 million in the fourth quarter of 2012 and $2.4 billion for the full year.

Alpha shipped 86.9 million tons of coal in 2013, compared with 108.8 million tons in 2012. Metallurgical coal shipments were 20.1 million tons, down from 20.3 million. Shipments of Powder River Basin coal and Eastern steam coal were 38.2 million tons and 28.6 million tons, respectively, compared with 46.7 million tons and 41.8 million tons in 2012.

Steam coal production was reduced to match production with demand, Alpha said in its earnings release.

Met Coal

Kevin Crutchfield, Alpha's chairman and CEO, described several events changing the market for metallurgical coal, particularly on world markets. The Australian dollar is weak, Australian mines have increased production and Chinese inventories are well-stocked, he said. Those have caused weakness in the market, he said.

On the demand side, global demand for steel is forecast to be 3.3 percent greater this year. In Europe, the demand for steel should grow 2.1 percent as opposed an estimated 3.8 percent decline last year, he said. Also, markets in Central and South America should improve, he said.

"While near-term pricing is clearly depressed, we've seen improved supply-demand balance on the mid-term horizon, as demand growth has expected to continue while supply growth should be much smaller in 2014, compared to 2013 and essentially flat after 2014," Crutchfield said. 

Thermal Coal

"The persistent cold spells we've experienced over the last several weeks have resulted in increased demands and interest in coal-fired electrical generation," Crutchfield said.

Coal stockpiles Dec. 31 were down 38 million tons from the previous year, he said. The year-end inventory stood at 64 days of burn compared to 84 days in December 2012, he said.

Stockpiles at power plants supplied by the Powder River Basin and Northern Appalachia are below their historical five-year averages. Stockpiles at plants supplied by Central Appalachian mines improved to 118 days from 155 days at the end of 2012, which is still higher than their historical average burn rate, he said.

Along with that, the price of natural gas stood at more than $5 per million BTUs compared with just over $3 in early 2013, he said.

"These dynamics have resulted in near-term price firmness in most regions, especially in Central App, where thermal prices as measured by NYMEX have risen approximately 10 percent from late November to late January," Crutchfield said.

Safety

Vining said Alpha achieved its safety goals despite moving people around from mine to mine, which normally hurts mine safety efforts.

"We had several thousand people that we sent home and probably equally as many that moved around the different seats or different mines and different parts of the organization," Vining said. "There was a lot of fluid movement. Whenever you have that, it's even a bigger challenge to keep people focused on their jobs and operating safely and productively.

"I haven't ever seen a particularly low-cost, productive profitable mine with a terrible safety rate. They go hand in hand, and it reflects typically the training of the workforce, the attention to detail and ultimately the attitude and the drive of the workforce that all come together to produce positive results on safety as well as productivity and cost."