Last year was good and this year will be better. That’s what coal operators are telling stakeholders. Alliance Resource Partners reported record cash flow in its Q4 2022 earnings report. (see News, p. 4) CONSOL Energy echoed those sentiments as did other coal operators, who were releasing their Q4 2022 financial reports as this edition was going to press.

The initial U.S. coal production report from the Energy Information Administration (EIA) indicates that total U.S. coal production reached 597 million tons in 2022. (see News, p. 7) That’s a 3.4% gain from the 577 million tons last year and the third consecutive year of gains since the bottom of the trough in 2020. If the market maintains a similar growth rate for 2023, total U.S. production will easily eclipse the 600-million-ton mark.

There are also several reoccurring themes among the nation’s leading coal producers. First, much of the 2023 production is already contracted in a better pricing environment. Second, they have managed to grow production despite shortages in supplies and poor service from rail carriers. Inflationary pressures and labor issues are driving up costs, but the premium on sales is offsetting those increases.

In this edition, Coal Age publishes the U.S. Longwall Census. It provides a roundup on what’s happening with this safe and highly productive subset of underground coal operators. Activity among the mines has stabilized somewhat. Last year two longwall mines closed and this year a new longwall mine will open, and another mine will add another face. The U.S. has a dozen longwall mines that produce more than 5 million tons per year and more faces will ramp up to that level soon. The quest to operate a longwall without a miner on the face continues and some believe it will soon be within reach.

This gain in market momentum in 2023 will not be limited to the U.S. China has started buying coal from Australia again. When the economy in China restarts in earnest later this year, seaborne coal markets could become really tight. Europe will need to source tens of millions of tons from somewhere other than Russia. South Africa has been unable to provide itself with power let alone increase exports. (see News, p. 5) Those that can export coal, Indonesia, Canada, Colombia and the U.S., will reap the rewards of increasing demand.

The demand for electricity and steel will only continue to grow. Likewise, the climate change and anti-carbon rhetoric will also intensify this year, even though it’s becoming more obvious that renewable energy cannot serve as dispatchable sources of power. As the self-imposed deadlines for carbon neutrality approach, more mining companies will bow to pressure to spin off coal mining segments. There will be rare opportunities this year for entrepreneurs to snap up quality coal properties. Enjoy this edition of Coal Age.