November 13, 2018 Read More →

Powder River Basin coal production continues falling

S&P Global Market Intelligence ($):

Coal mines in the Powder River Basin bounced back from the rain-soaked second quarter, increasing production 18.9% in the third quarter, but still saw year-over-year declines. Ten of the top 16 mines reported production decreases from 2017, lowering the region’s output by 5% to 86.6 million tons, according to data compiled by S&P Global Market Intelligence.

Despite reporting a $41.5 million net loss in the third quarter and filing for bankruptcy in October, Westmoreland Coal Co. saw significantly higher production levels at two of its mines in the third quarter than in the second. The Absaloka mine posted a 33.7% production increase, the largest among the basin’s top performers, producing 1.1 million tons. The Rosebud mine, which the company plans to sell alongside its other core assets, saw a 22.4% quarter-over-quarter uptick but the largest year-over-year percentage decline among the top producers with a 29% decrease to 1.8 million tons.

The effects of the second-quarter rains carried over into Cloud Peak Energy Inc.’s third-quarter production. The company reported in an Oct. 25 earnings call that the moisture caused instability in its Antelope surface mine’s dragline pits. As miners removed coal from the pits, wet spoil would shift down into the pit and block the coal. CEO Colin Marshall said the company anticipates that fourth-quarter shipments will be constrained but “there’s no reason why Antelope can’t perform the way it should next year.” The pits are expected to “return to their normal cycle” by the end of 2018.

Antelope had the second-largest year-over-year production drop during the period, with a 26% decrease to 5.8 million tons. The company’s Spring Creek mine produced 5.3% less coal year over year with 3.7 million tons, and the Cordero Rojo mine’s production dropped 10.5% to 3.4 million tons. All three saw at least a slight improvement over the second quarter’s production levels, with the Antelope mine posting an 18.6% quarter-over-quarter uptick.

Peabody Energy Corp.’s North Antelope Rochelle mine, the largest coal mine in the country, posted a 22% uptick from the second quarter to 26 million tons, though levels were down 6.3% from the year-ago period. Its Caballo and Rawhide mines also saw production increases from the second quarter, rising 16.2% to 3.1 million tons and 29.3% to 2.4 million tons, respectively.

More ($): Powder River Basin Q3 coal output improves from Q2 but down 5% from year ago

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