The mine, operated by Kopper Glo Mining LLC, has about 25 employees.
In 2016, Corsa anticipates metallurgical and steam coal sales between 1.5 and 1.8 million tons. If either figure is achieved, it would surpass the 2015 total of 1.5 million tons. Last year, sales were almost evenly split between the company’s Northern Appalachia (NAPP) operations, 740,000 tons, and Central Appalachia (CAPP) mines, 761,000 tons. In 2015, Corsa said it realized price per ton sold in NAPP at $77.11, compared with $66.53 in CAPP. Production costs per ton sold were $67.68 in NAPP and $57.53 in CAPP, translating into sales margins of $9.43/ton and $9/ton, respectively.
Despite a challenging coal pricing environment in 2015, Corsa said it achieved positive adjusted EBITDA of $2 million at its NAPP and $4 million at its CAPP division. George Detlefsen, Corsa CEO, said he was “extremely proud of our financial and operating performance for the year, as our reductions in cash mining costs have outpaced the decline in average realized coal prices.” Company officials have taken steps “to reduce every major cost driver and have ambitious targets to dramatically reduce our fixed and variable cost structure further in 2016.”
Detlefsen said he is starting to see signs of improvement in the met coal and steel markets, with domestic steel pricing recovering and spot seaborne met coal prices rising in early 2016. “We believe that supply cuts will serve as a catalyst for improved metallurgical coal pricing in 2016 and expect to see the domestic market recover faster than the seaborne market, given the extreme financial distress of metallurgical coal producers and the potential for significant supply disruption.”
In Corsa’s NAPP division, current met coal prices remain at depressed levels and a substantial amount of global production is uneconomic. That situation emerged, Corsa said, as a result of global producers committing to multibillion dollar projects during a significantly higher price environment several years ago. Downward pressure on seaborne met coal prices also was exerted by weak Chinese demand for imported met coal, in combination with a strong U.S. dollar and low dry bulk freight rates, Corsa said.
Corsa’s met coal sales from its NAPP division in 2016 are expected to be between 600,000 and 700,000 tons, with about 46% of those sales “currently committed at the midpoint of the range,” Corsa said. Actual sales will depend on customer demand and market conditions. Should the market improve, Corsa said it has the ability to produce and sell “significantly more tons of metallurgical coal in 2016.”
In its CAPP division, Corsa said it will continue to target the industrial market as it transitions from an electric utility supplier to an industrial supplier during 2016. That is where Cooper Ridge is expected to help. “The opening of the Cooper Ridge mine will position CAPP to service the industrial specialty coal markets,” Corsa said. “These specialty markets are well-suited for CAPP’s coal qualities and relatively protected from natural gas prices and historically reflect higher pricing than the thermal markets.”