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Allegiance Coal confirms start of production at New Elk

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World Coal,

Allegiance Coal Ltd has announced the commencement of production at the New Elk Mine and its production and sales plans for 2H22.


  • Coal production commenced in the Blue Seam at the New Elk Mine on 21 May 2021 with the first production unit.
  • Second production unit to be brought forward commencing in August 2021, previously planned for November 2021.
  • Small volume supply contract agreed for initial Blue Seam production to a local domestic customer for early June 2021 delivery, which may lead to a small volume, fixed price, long term supply contract.
  • M Resources (New Elk’s sole marketing and sales agent), has negotiated and agreed commercial terms (subject to documentation), for four 70 000 t cargoes of Blue Seam to Asian steel mill customers for delivery August, October, November, and December 2021, respectively, all shipped ex-Port of Guaymas, on the Pacific Coast of Mexico providing a relatively shorter sail time to Asian markets.
  • Purchase and blending of Pratt Seam coal delayed to August 2021 start due to the Black Warrior River closing down from 23 June to 24 July 2021 for river lock maintenance, and blended Blue Pratt Seam sales will now be aligned with the start of the second production unit in the Blue Seam in August 2021 (as noted above).
  • M Resources has also received strong interest from global steel mills for Blue Seam supply with multiple requests for drum samples coming from customers in natural markets for US HV coals, which will be sourced and supplied from mine production over the coming months with a view to index linked, longer term offtake.
  • Demand for US coking coal remains strong and is likely to continue to do so while the Chinese Australian political conflict continues, and a recent spike in Australian coking coal prices bodes well for pricing in the medium term.

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