Arch Resources Inc. reported a net loss of $78.5 million in the fourth quarter of 2020, compared with a net loss of $8.6 million in the prior-year period. The net loss included a $45 million charge primarily related to the planned, accelerated closure of the Coal Creek mine in the Powder River Basin (PRB). Revenues totaled $360.6 million for the three months ended December 31, 2020, versus $549.5 million in the prior-year quarter.
Despite the challenges created by the pandemic, Arch said it made significant progress on a number of strategic objectives during 2020. Arch maintained momentum at the Leer South project, which remains on budget and on track to commence longwall production in the third quarter; drove further progress in the shift to metallurgical markets via the contribution of the Viper mine to Knight Hawk; and initiated an accelerated final reclamation and closure plan in the PRB.
“I am incredibly proud of how the Arch team persevered to execute at such a high level in the face of prolonged market headwinds and an increase in COVID-19 rates that mirrored the nationwide surge,” CEO and President Paul A. Lang said. “Through our team’s significant efforts, we have laid the foundation for robust value creation as the world recovers from the pandemic, the economic rebound continues, and the global transition to a low-carbon economy advances.”
During the quarter just ended, Arch invested a total of $57 million at Leer South. Excluding capitalized interest, Arch expended a total of $206 million on the project in 2020, and a total of $306 million since the project’s launch in early 2019.
“We are in the stretch run in the Leer South buildout, and the project team continues to do an exceptional job of managing capital spending and staying on schedule for a third-quarter 2021 startup of the longwall,” COO John T. Drexler said. “Importantly, we remain comfortable with our original projection of a total capital spend of $360 million to $390 million to complete the project, although the impact of COVID-19-related shift losses and quarantining efforts on our capitalized development costs are now likely to push us towards the upper end of that range.”
With the addition of Leer South, Arch expects to expand its High-Vol A metallurgical output by an incremental 3 million tons annually.
Leer South started to take delivery of the longwall equipment and expects to have the full longwall system