May 11, 2019 - CONSOL Energy Inc. is developing a new low-vol metallurgical coal mining operation in Itmann with an estimated completion date in 2021.
Preliminary estimates put the number to be employed at the new mine between 100 and 150, according to Zach Smith, CONSOL Energy external affairs manager.
Construction of the mine is expected to begin late this year or early next year, depending on successful permitting and project development efforts. Both efforts are ongoing and progressing as planned, according to a press release.
Full production is expected in 2021, upon the completion of a new preparation plant.
The Itmann project is expected to yield more than 600,000 tons per year of high-quality, low-vol coking coal production at full run rate and has an anticipated mine life of more than 25 years.
The company expects total capital expenditures of $65 to $80 million over the next two years to develop the mine and new preparation plant.
"We are very pleased to announce the commencement of the Itmann Mine project, our first major growth initiative," said Jimmy Brock, CONSOL Energy chief executive officer.
"Since becoming an independent publicly-traded company, we have meaningfully de-levered our balance sheet and improved our liquidity through strong operational performance and completion of our 1Q19 refinancing.
“We also continue to return capital to our shareholders through our expanded repurchase program announced today.
“The Itmann Mine begins the next phase of our evolution, as we are now focusing on strategic and controlled growth as an additional avenue to increase our per-share value,” Brock said.
He said consistent with the company's goal of being a low-cost, high-margin producer of high-quality products, "We believe the Itmann Mine will align perfectly with our current asset base. It will further diversify our already robust portfolio by adding a new metallurgical coal product stream to the mix."
Brock said when combined with their current crossover metallurgical product from the Pennsylvania Mining Complex, which they anticipate will continue to become more attractive in the marketplace with an upcoming improvement in sulfur content, the addition of this new Itmann product should allow them to consistently produce 2.5-plus million tons of metallurgical quality coal annually, after the mine and preparation plant are constructed and fully functioning in 2021.
“We are also excited about the timing of the Itmann project, as coking coal prices remain attractive. While other new metallurgical coal supply is expected to emerge in the U.S. in the coming years, we believe that most of this new supply will be focused on high-vol metallurgical products; meanwhile, the Itmann Mine is targeted at the domestic low-vol production space, which recently has seen some supply come offline, and which we believe could continue to remain constrained going forward due to limited availability of high-quality reserves.
“Our initial market outreach has indicated a strong interest level among domestic and international customers in the Itmann product,” Brock noted.
CONSOL Energy Inc. is a Canonsburg, Pa., based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal.