For the quarter, CONSOL Energy’s coal margins expanded by $7.09/ton, to $21.56/ton, mainly driven by higher sales prices. Most of the increase in average realized prices came from the company’s low-vol coal sales, where realized prices were $207/ton, FOB mine. This approximates an FOB Terminal price of $282/metric ton (mt).
“We exceeded our expectations on coal production and our sales team sold a record 1.5 million tons of Bailey coal into the high-vol coking coal market,” said Brett Harvey, chairman and CEO, CONSOL Energy. “Strategically, CONSOL Energy is participating fully in the growth of global coal markets,” Harvey said. “In 2011, we plan to export 10 million tons, which should generate over $1 billion in revenue. In the second quarter, our Baltimore Terminal loaded a near-record 41 vessels and shipped 3.4 million tons of coal. To accommodate future growth, we are expanding our terminal, we are developing the BMX Mine in the Pittsburgh seam, and we are re-starting our Amonate Mining Complex. All three of these coal projects are driven by increased worldwide coal demand.”
For the first time in decades, CONSOL’s coal division has generated more cash from met business than from its thermal business, Harvey explained, demonstrating the company’s significant presence in the growing metallurgical markets.