CONSOL Energy Inc. has commenced the development of a new low-vol metallurgical coal mining operation in Wyoming County, West Virginia, with an anticipated completion date of 2021. The Itmann mine, the company’s first major growth initiative, will produce 600,000 tons at its full run rate.
“Since becoming an independent publicly-traded company, we have meaningfully deleveraged our balance sheet and improved our liquidity through strong operational performance and completion of our first-quarter 2019 refinancing,” CEO Jimmy Brock said. “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 added that the new mine will align with the company’s current asset base. “It will further diversify our already robust portfolio by adding a new metallurgical coal product stream to the mix.”
When combined with metallurgical product from the Pennsylvania Mining Complex, it will allow the company to consistently produce 2.5 million-plus tons of metallurgical quality coal annually, once the Itmann 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,” Brock said. “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.”
He added, “Our initial market outreach has indicated a strong interest level among domestic and international customers in the Itmann product.”
The Itmann project has an anticipated mine life of 25-plus years. Construction of the mine is expected to begin in late 2019 or early 2020, pending successful permitting and project development efforts, which are ongoing and progressing as planned.
Total capital expenditures will be $65 million-$80 million over the next two years to develop the mine and preparation plant.