Image Source: Arch Resources
Arch Resources Inc has reported a net loss of USD 191.5 million in the third quarter of 2020, compared with net income of USD106.8 million in the prior-year period. Arch’s chief executive officer Paul A Lang said “During the third quarter, Arch’s core metallurgical segment maintained its strong, consistent track record of operational excellence and first-quartile cost performance. Just as importantly, the Arch team continued to make excellent progress in the development of Leer South, which should greatly enhance the cash-generating capabilities of our already high-performing metallurgical portfolio through the cycle and solidify our position as the world’s leading producer of High-Vol A metallurgical products when it starts up in less than a year’s time. We believe that the strong foundation of our existing metallurgical portfolio, the rapidly approaching startup of the longwall at Leer South, and an improving global market outlook sets the stage for value-driving increases in earnings and cash flow going forward.”
During the quarter, our core metallurgical segment continued to exhibit tight, disciplined cost control while ramping up shipping volumes in response to a gradually improving market environment. Once again, the Leer mine set the tone, with cash costs in the mid-$40 per ton range, demonstrating yet again why we remain highly focused on getting the Leer South longwall online at the earliest possible date.
Operational Update
| Heading | 3Q20 | 2Q20 | QoQ | 3Q19 | YoY |
| Tons sold (in millions) | 2.0 | 1.5 | 33% | 2.1 | -5% |
| Coking | 1.7 | 1.3 | 31% | 1.9 | -11% |
| Thermal | 0.3 | 0.2 | 50% | 0.2 | 50% |
| Coal sales per ton sold | $67.04 | $76.17 | -12% | $98.89 | -32% |
| Coking | $75.18 | $84.26 | -11% | $105.72 | -29% |
| Thermal | $18.09 | $18.12 | 0% | $32.13 | -44% |
| Cash cost per ton sold | $60.78 | $61.95 | -2% | $64.89 | -6% |
| Cash margin per ton | $6.26 | $14.22 | -56% | $34.00 | -82% |
Coal sales per ton sold and cash cost per ton sold are defined and reconciled under “Reconciliation of non-GAAP measures.”
Mining complexes included in this segment are Beckley, Leer, Mountain Laurel and Leer South/Sentinel.
Outlook – Mr Lang said “We are excited about the tremendous, value-creating potential of our business going forward. We have an exceptional foundation on which to build, including a clear and carefully constructed strategy, low-cost metallurgical assets, a high-quality product slate, proven marketing and logistics expertise, industry-leading ESG performance, and a best-in-class growth project that is nearing fruition. Moving forward, we plan to drive operational excellence throughout the organization; augment our strong financial footing; deliver still further improvement across key ESG metrics; and forge ahead with Leer South, which we believe will set the stage for greater cash generation and value creation in the future.”
