Corsa Coal Corp., a metallurgical coal producer based in Pennsylvania, issued its first-quarter earnings statement this week. The company’s interim President and CEO Kevin M. Harrigan noted that many challenges persist, mainly related to mining geology and labor-availability productivity issues.

“Geologically, our Casselman mine is nearing the end of its reserve life and we are operating in areas that typically may not be mined due to the lower thickness of the coal seam,” Harrigan said. “However, existing orders and market conditions allow these reserves to be mined and extend the economical coal reserve life albeit with significantly increased mining costs per ton sold when compared to our historical results. Corsa is also establishing a second working pit at its Schrock Run Extension mine.”

He added that just like other U.S. coal operators, they are also experiencing transportation and labor issues.

“An ongoing shortage of experienced and skilled labor limits our production capabilities while hiring and training of inexperienced miners decreases our labor efficiency and increases our labor costs per ton,” Harrigan said. Corsa continues to explore ways to attract and retain employees.

Productivity issues at Corsa’s mines has hindered their ability to take advantage of higher priced opportunities in the spot market during the quarter as they filled existing fixed price domestic orders.

“We expect this trend to continue into the second quarter or until we can obtain the personnel necessary to fully staff our mines and improve coal production,” Harrigan said. “While Corsa was able to benefit from improved realized pricing on our fixed price contracts, we continue to focus on increasing our operations and improving productivity so that we can further benefit from the current metallurgical coal price environment.”

Corsa highlighted the current situation in the metallurgical coal markets. Met coal price levels opened the first quarter of 2022 at $357.75/metric ton (mt) delivered-to-the-port (FOB) for spot deliveries of Australian premium low-volatile metallurgical coal and closed the quarter at $515.00/mt FOB. The average price for the first quarter of 2022 was $486.57/mt FO for Australian premium low-volatile metallurgical coal, compared to $368.92/mt FOBT in the fourth quarter of 2021, and traded in a range from a high of $670.50/mt FOB to a low of $357.75/mt FOB.

The forward curve for the balance of the second quarter of 2022 according to the SGX TSI index is trading at $504.84/mt FOB with May at $522.00/mt FOB and June at $487.67/mt FOB. Forward curve pricing for the balance of 2022 is trading at an average of $440.33/mt FOB with the second quarter at a high of $504.84/mt FOB and the fourth quarter at a low of $393.33/mt FOB. The forward curve for 2023 is indicating pricing at an average of $337.17/mt FOB.