In the second quarter of 2016, his company shipped 1,464,000 tons of steam coal at an average price of $45.27/ton. This was a little ahead of schedule, he said, “and basically due to our customers’ increased demand for power,” so “they asked us to ship ahead of our contracted responsibility.”

He acknowledged that has not been the case with the entire U.S. coal industry. “As we sit here today, approximately 40% of the U.S. coal industry is in bankruptcy and we estimated another 15% if near bankruptcy,” he said.

Hallador, though, was pleased with its financial results in the April-June period. The company generated $15.9 million of free cash flow in the quarter, with that money used in part to pay down $6.6 million in bank debt and fund its share dividend and capital expenditures.

For the first six months of 2016, Hallador shipped 3,090,000 tons of steam coal at an average price of $45.93/ton. Most of that coal originated from its two Oaktown underground mines in Knox County, Indiana. In the second half of the year, the company is contracted to ship just under 2.9 million tons at an average price of $43.57/ton.

Hallador is forecasting full-year 2016 sales to be in the range of 6 million to 6.2 million tons. As of August, it had minimum sales commitments of 4.6 million tons at an average price of $44.47/ton for 2017.

Those numbers are expected to increase as buying accelerates. “We think it’s likely that we’ll see additional sales this year,” Bilsland said. However, if more sales fail to materialize in the coming months, “our volumes will be lower in the second half of 2016.”

As he observed, the domestic coal market “has been long for a long period of time,” so utility customers are “very cautious to come back and start buying.”

That said, “I think there is a lot of utilities that need to purchase coal for 2017, perhaps even 2016 as well,” he added. “So the attitude has changed dramatically. In the March-April time frame of 2016, I think a lot of companies were questioning how much coal they were ever going to buy again. And as a result of this hot summer, I think utilities have been reminded that they can burn a lot of coal in a hurry. So we look for buying to occur later this year.”

More consolidation in the U.S. coal industry is something else that may occur, in Bilsland’s opinion.

In response to a question, he said, “I think you are seeing consolidation happen. I mean, if you look at the state of Indiana just a few years ago when we bought out [Vectren Fuels], the coal assets, there has been a couple of other smaller players that had sold assets off,” although those deals may not have attracted as much attention as the numerous coal company bankruptcies.

Earlier this year, for instance, Sunrise closed on the purchase from Triad Mining of 14 million tons of proven and probable underground reserves in Indiana and a coal sales agreement associated with the Freelandville mine in Knox County. Triad is a wholly owned subsidiary of Blackhawk Mining LLC of Lexington, Kentucky. The Freelandville mine was idled following the transaction.