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Arch Coal results reflect challenging market

World Coal,

Arch Coal has released its Q1 2014 results, announcing a net loss of US$ 124.1 million.

Challenging coal market

Arch CEO, John Eaves, commented: “As expected, our first quarter results reflect a challenging global metallurgical coal market and the impact of rail performance issues. At Arch, we are taking proactive steps to manage our controllable costs and capital spending, reduce our cash outflows and preserve our liquidity.

“Moreover, we are reducing our expected metallurgical coal sales volume by approximately 1 million t for 2014 in response to soft market conditions and concentrating our metallurgical production in our lowest-cost assets in Appalachia. Based on the smooth start-up of the Leer longwall mine in the first quarter of 2014, we also are lowering our full year cost-per-ton guidance in Appalachia.

“At the same time, we are encouraged by the strengthening dynamics in the US thermal market. Positive electric generation and coal demand trends to date, declining US coal generator stockpiles and higher competing fuel prices should provide the catalyst for improvement in our domestic thermal coal operations during 2014.”

Safety and environment

Arch subsidiaries earned 12 safety and environmental awards in Q1 2014. Most notably, Arch’s Leer mine attained the 2013 Greenlands Award, West Virginia’s top environmental honor in the US coal industry.

In addition, the Coal-Mac operation completed 2 million employee hours without a lost-time safety incident in March 2014. Furthermore, five of Arch’s operations and facilities attained a ‘Perfect Zero’ – a dual goal of operating without a reportable safety incident or environmental violation in the first quarter of the year.

Arch Coal Executive VP, Paul Lang, commented: “We commend our employees for achieving such safety and environmental accomplishments, and for their ongoing commitment to living our core values. We are constantly striving for improvement at all of our operations, with an ultimate goal of a ‘Perfect Zero’ across our entire operating platform each and every quarter.”

Operational results

Commenting on the company’s operational results, Lang said: “During the first quarter of 2014, our Appalachian region, anchored by the Leer mine, delivered its strongest cost performance since 2011, prompting a reduction in our 2014 expected cost per ton for that region. In addition, increased domestic thermal demand has resulted in an improving outlook for the West Elk mine in Colorado, prompting us to reduce our 2014 cost per ton for that region. In the Powder River Basin, we remain focused on achieving further improvement during 2014 as rail congestion eases and customer demand climbs.”


With regard to market trends, Eaves concluded: “We are seeing a strengthening domestic thermal market in 2014, supported by improved power demand, depleting customer coal stockpiles, higher natural gas prices and low natural gas storage levels that will need to be rebuilt.”

Edited from various sources by Katie Woodward

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