During the first quarter, Arch Coal invested $62.1 million in the continued build-out of Leer South in West Virginia, USA, bringing the capital expended on the project to $165 million since its launch in February 2019. Arch reaffirmed it expects to invest a total of $360 million to $390 million in the project, including $220 million during full-year 2020.
“We are making strong and consistent progress and maintaining tight capital discipline in the development of Leer South, which we view as the industry’s premier growth project,” COO John Drexler said. “We are achieving excellent rates of advance in the development of the first longwall panel, which is more than two miles long, and we remain on track for the commencement of longwall production in the third quarter of 2021.”
With the addition of Leer South, Arch expects to increase its annual high-vol A output to around 8 million tons; enhance its already advantageous position on the U.S. cost curve; strengthen its coking-coal profit margins across a wide range of market conditions; and cement its position as the leading supplier of high-vol A coal globally.