Coal firms announce substantial profits
By Nicole Pollack
Via- Wyoming News Exchange
CASPER —It’s been a good year for Wyoming coal.
The two major mining companies operating in the state — Arch Resources and Peabody Energy — both announced a second consecutive quarter of substantial profits.
Arch, which owns the Black Thunder Mine, reported net third-quarter income of $181 million, while Peabody, owner of the North Antelope Rochelle Mine, brought in $375.1 million in the third quarter.
The companies’ results dipped compared with the previous quarter, when they announced earnings of $407.6 million and $409.5 million, respectively.
Both surpassed their third-quarter results from 2021 and 2020; Peabody reported net losses both years.
Arch and Peabody have adopted very different approaches to their Powder River Basin coal mines, with Arch focused on maximizing profit ahead of early closures while Peabody aims for longer-term coal mining in the region.
During the third quarter, Arch’s Powder River Basin operations, at the Black Thunder, Coal Creek and West Elk mines, earned close to $97 million.
Peabody earned just under $38 million from the North Antelope Rochelle, Caballo and Rawhide mines.
Arch has completed about 75% of its final reclamation at the Coal Creek Mine, John Drexler, a senior vice president at the company, said on a call with investors last week.
The mine is set to close around the end of this year.
“By employing this logical wind-down strategy, we believe we’re delivering the greatest long-term value for our shareholders, while at the same time providing an appropriate transition period for all of our stakeholders, including our employees, our customers and the communities in which we operate,” Arch CEO Paul Lang said during the call.
The popularity of coal as an electricity source has declined sharply over the last decade due to its higher greenhouse gas emissions and fuel costs compared with alternatives like natural gas and renewables.
But Powder River Basin coal has enjoyed a temporary rebound in demand as the price of natural gas — often its direct competitor — soared as a result of the COVID-19 pandemic and Russia’s war in Ukraine.
Both companies said higher contract prices and improving rail service have helped to boost their quarterly performance.
“Across the U.S., we continue to see growing caution regarding the pace of energy transition and the value of dispatchable capacity,” such as coal-fired power plants, Peabody CEO Jim Grech said on a Thursday call with investors.
“This speaks to continued strong coal demand,” Grech added.
Arch and Peabody each anticipate similar — and potentially superior — results in the region during the fourth quarter and next year.
Arch has committed more than 90% of its expected 2023 yield at set prices. Peabody has done the same for a similar share of its 2023 production.