Coal Output Declined 14.3% at Top 25 Central Appalachian Mines in 2020
By Jacob Holzman
February 18, 2021 - Coal production at the top 25 mines in the Central Appalachian basin of the U.S. held steady during the fourth quarter of 2020 while output slumped for the full year, according to an analysis by S&P Global Market Intelligence.
The top 25 active mines in the region produced 6.28 million tons of coal during the last three months of 2020, an 8% increase from 5.8 million tons in the preceding quarter and nearly equal to the 6.27 million tons of coal mined in the prior-year period. The basin yielded 24 million tons of coal over all of 2020, a 14.3% drop from 28.1 million tons of coal mined during 2019.
The already beleaguered U.S. coal industry has been hit hard by the global coronavirus pandemic. Shattered power and construction demand expectations and infections at mine sites rattled coal companies throughout the year and left some executives scrambling to reposition their companies for an uncertain future beyond the pandemic.
For Arch Resources Inc., the COVID-19 crisis has fueled a faster transition away from the business of thermal coal. Two of the top producing mines in the Central Appalachian basin during the fourth quarter of 2020 were Arch-run assets, and both recorded production decreases quarter over quarter and year over year. The company has said it expects similar coal shipment volumes in the first quarter of 2021 on a quarterly basis.
"We're continuing to see the impact of COVID here. And we think over time we'll continue to manage the COVID effectively. We're encouraged with the vaccine rollout," Arch Senior Vice President and COO John Drexler said during a Feb. 9 earnings call.
Alpha Metallurgical Resources, a rebranded entity previously known as Contura Energy LLC, booked the most production for the region in the fourth quarter of 2020. The company operates 10 of the top 25 group for the region, and six of the operations improved production year over year during the period. That includes the underground Deep 41 and Deep 44 mines in Virginia as well as the underground Jerry Fork Eagle and Road Fork No. 52 mines in West Virginia, the last of which did not produce any coal in the last quarter of 2019.
Second in output during the fourth quarter of 2020 was Liechtenstein-based Sev.en Energy AG, which entered the U.S. market through certain acquisitions during the summer of 2020. The company's five mines in the top rankings had mixed results with some, such as the American Eagle mine in West Virginia, improving their quarterly performance compared to the previous year. Full-year production decreased at the operations to an aggregate 4 million tons in 2020 compared with 5.2 million tons in 2019.
The Buchanan No. 1 mine in Virginia produced the most coal in the region during the fourth quarter of 2020, comprising 1.2 million tons. The operation produced 710,000 tons in the previous quarter and 988,000 tons in the prior-year period. Even still, total output for 2020 dropped 23.8% to 3.8 million tons from 4.9 million tons in 2019. Buchanan No. 1 is owned by Coronado Global Resources Inc.