According to Coal Age’s 2016 Prep Plant Survey, there are 252 coal preparation plants operating in the United States, compared to 269 plants last year. Central Appalachia has a high concentration of preparation plants and it’s also the region that has been hit hardest by the downturn in the coal business. Keeping that in mind, one could look at the information gleaned from this data set and draw the conclusion that the situation is not as bad as it could have been.
A total of 17 plants were removed from the census. That is important because the census lists all of the plants, including the ones that have been idled, even if they haven’t operated in 25 years. To be removed from the list, Coal Age received no response form the survey, no listing can be found in the Mine Safety and Health Administration’s (MSHA) Data Retrieval System (DRS) and a check of Google Earth shows that the plant has been scrapped.
Relying solely on MSHA’s DRS presents a few problems. During the last year, a number of plants have changed hands. And, while the MSHA administrators are quite capable and it’s a great system, the names of the mines and plants and the operators have changed and the agency hasn’t been able to keep the system updated.
Dig a little deeper into the data and one will see that the census this year lists 59 plants as idled vs. 50 last year, which amounts to 23.4% and 18.9% of the entire population, respectively. Logically, one would think that the plants that were removed were idled for a lengthy time before being removed so the difference in idled plants between this year and last is actually not as great as the numbers indicate.
Even though demand has been slack and the number of idle plants has grown, there is some activity taking place in the market — albeit mostly acquisitions on the courthouse steps. A number of names disappeared from the U.S. Prep Plant Census, names such as Cliffs Natural Resources, Patriot Coal, Springfield Coal and Walter Energy. Likewise, a number of new names have emerged, such as Contura Energy, Coronado Coal, Corsa Coal, ERP Compliant Fuels, Kingdom Coal, Lipari Energy, Quest Energy, Ramaco, Seminole Coal Resources, Seneca Coal Resource and Warrior Met Coal.
A number of mid-size coal operators acquired assets from coal companies during the reorganization and grew, companies such as Blackhawk Mining, Booth Energy and Revelation Energy.
Many of the names in Alabama changed. Walter Energy is now Warrior Met Coal and ERP Compliant Fuels purchased the former U.S. steel mines that were owned by Cliffs, which included the Concord plant in Alabama and the Pinnacle plant in West Virginia, and placed them under Seneca Coal Resources. ERP also acquired two Walter Energy plants in West Virginia (Gauley-Eagle and Katie) and placed them under Seminole Coal Resources.
In Kentucky, Quest Energy purchased the Mill Creek plant as part of Deane Complex from Rhino Resources. Revelation now owns the idled Red Bird plant, which was operated by JW Resources. Booth Energy also acquired the Bear Branch and Beech Fork No. 1 plants in Kentucky.
The first-lien holders in the Alpha Natural Resources reorganization formed Contura Energy and acquired several properties from the former company in Pennsylvania, Virginia and West Virginia. Corsa Coal acquired the former PBS properties in Pennsylvania and Coronado Coal acquired the Buchanan and the idled Amonate properties from CONSOL Energy.
The biggest deal took place in West Virginia as the Patriot properties were sold to ERP Compliant and Blackhawk Mining. West Virginia suffered the greatest loss with 10 plants being removed and the number of idled plants growing from 16 to 20. For the first time in a very long time, the number of active U.S. prep plants has dropped below the 200 level.
Central Appalachia has a high concentration of prep plants and it’s also the region that has been hit hardest by the downturn.
View the entire U.S. Prep Plant Census here.