DOE Invests $44M in Carbon Capture Technologies Projects

The U.S. Department of Energy’s (DOE) Office of Fossil Energy selected seven projects to receive $44 million in federal funding for cost-shared research and development through the announcement, Design and Testing of Advanced Carbon Capture Technologies.

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MEC Completes Acquisition of Armstrong Properties

Murray Energy Corp. (MEC) announced that its unrestricted subsidiary, Murray Kentucky Energy, has completed its acquisition of a 51% interest in Western Kentucky Coal Resources LLC, which holds certain assets formerly owned by Armstrong Energy Inc.

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China Caps Thermal Coal Prices

China’s Qinhuangdao port started to cap thermal coal prices for FOB 5,500 kcal/kg coal at RMB750 per metric ton (mt) ($118.28/mt), following a request from China’s National Development and Reform Commission (NDRC). Colder-than-normal weather in January resulted in strong thermal coal demand and a subsequent increase in prices. Spot thermal coal prices for FOB Qinhuangdao 5,500 kcal/kg reportedly reached RMB780/mt ($123/mt) recently.

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Warrior Met Coal Prepares for 2018

Warrior Met Coal, the leading U.S. exporter for high-quality metallurgical coal, confirmed it has completed three planned longwall moves. It plans to ramp up production in Alabama to meet a tight market for the high-quality premium met coal market. Prices for seaborne met coal are expected to climb higher in the first quarter of 2018, reflecting resilience in global steel production, as well as the effects of met coal supply disruptions in Australia and supply side reforms in China.

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Peabody: 2017 was a Substantial Year of Improvement

In its fourth-quarter earning’s statement, Peabody Energy reported that revenues for the fourth quarter increased 5% year-on-year to $1.52 billion on continued robust seaborne pricing and 4% higher Australian export volumes, leading to Australia’s largest quarterly revenue contribution in five years. Full-year 2017 revenues increased 18% over the prior year to $5.58 billion, driven by higher Australian metallurgical and thermal coal pricing and an 11% increase in Powder River Basin coal shipments.

“A highly successful fourth quarter capped a year of substantial achievement for Peabody, as the company delivered results and generated value,” said Peabody President and CEO Glenn Kellow. “Fourth-quarter results reflect strong operational performance, significant cash generation and debt repayment, meaningful release of restricted cash and continued share repurchases, and we have much more progress targeted for 2018.”

Fourth-quarter sales volumes for Peabody’s Australian platform totaled 8.8 million tons, including 4 million tons of metallurgical coal sold at an average price of $127.14/ton and 3.4 million tons of export thermal coal sold at an average price of $72.89/ton, with the remainder delivered under domestic contracts. Fourth-quarter Australian thermal coal realized pricing increased 15% to $55.22 per ton, driven by strong seaborne demand.

In line with the company’s full-year targets, the Australian operations shipped 11.7 million tons of metallurgical coal and 12.5 million tons of export thermal coal in 2017 at average realized prices of $132.29/ton and $68.95/ton, respectively. The company credited strengthening seaborne pricing, productivity improvements and record North Goonyella production for the Australian platform’s performance.

Peabody’s U.S. operations delivered 40.4 million tons of coal on the fourth quarter, in line with the prior year. Revenues per ton increased 2% to $18.38/ton, primarily due to favorable mix and the benefit of a contractual settlement. U.S. costs per ton increased largely due to planned maintenance in the Midwest and higher fuel costs across operations.

For the full year, the U.S. platform delivered average Adjusted EBITDA margins of 25%, largely driven by the benefit of a contractual settlement and improved cost performance in the Western segment related to higher Twentymile mine volumes and favorable ratio changes at the Kayenta mine.