Alpha CEO excited about company's prospects for 2018

Hank Hayes • Jan 18, 2018 at 1:03 PM

KINGSPORT — Alpha Natural Resources on Wednesday projected sales of 13 – 14.6 million tons of coal in 2018.

Alpha broke that down to approximately 6.8 – 7.8 million tons of metallurgical coal and 6.2 – 6.8 million tons of thermal coal.

“I am excited about what’s to come for Alpha in 2018,” Alpha CEO David Stetson said in a news release. “We have diligently worked over the past 18 months to create a business model that will allow Alpha to thrive in any market. We have invested in our people and our properties to create a company that can quickly adjust its production to match the coal markets. We have driven down the costs associated with our operating mines since our emergence from bankruptcy in July 2016 and remain focused on maintaining a competitive cost structure. We continue to provide our long-standing domestic utility and steelmaking customers with the reliable service and premium coals they have come to expect and continue to see demand for our high-quality thermal and metallurgical coals in the international market. I believe that Alpha is ready and able to exploit the opportunities that present themselves this year.”

Alpha reported more than half of its metallurgical sales in 2018 will be under a multi-year arrangement to a counterparty for ultimate sale to third parties in the international market. The company said the majority of its thermal sales are to longstanding domestic utility customers with the remaining thermal production to be sold domestically or into the export market via spot sales.

“This past year was truly transformational for Alpha,” said Stetson. “The sale of properties to Lexington Coal in October 2017 will not only relieve our obligations associated with legacy properties, but will enable our team to focus our capital and resources toward sustaining and growing Alpha as the leading producer of high-quality coals in the Central Appalachian region.”

Alpha also announced it expects sales in the fourth quarter of 2017 to be 1.9 million tons of metallurgical coal and 1.7 million tons of thermal coal; and full year 2017 sales of 7.9 million tons of metallurgical coal, including 1.0 million brokered tons, and 7.0 million tons of thermal coal. With the Lexington Coal transaction closing in the fourth quarter of 2017, Alpha expects to incur a one-time loss of approximately $165 million, which includes costs associated with maintaining idle properties, professional and banking fees and employee-related expenses. The company said the full benefits of the Lexington Coal transaction are expected to be realized this year.

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