The Pittsburgh-based producer said that its coal division produced 8.3 million tons during the period ended June 30, including 1 million tons of low-vol coking coal from the Buchanan mine. The results are in line with its previous Q2 guidance of 8.1-8.5 million tons and low-vol tonnage of 850,000 to 950,000 tons.
CONSOL’s Bailey complex had record production of 2.6 million tons in April and the Enlow Fork sealing project, which involved sealing 11 airshafts and eliminating 6.8 miles of underground belt and track haulage, was completed on schedule on June 30.
“The sealing project was possible due to the overland belts and new slope that were commissioned in the first quarter of 2014,” officials said. “As a result of sealing this area, CONSOL expects more than $3 million in annual power savings,” adding that maintenance costs and potential risks to employees in the older areas of the mine will be eliminated, and the mine is now approximately 70% sealed.
“The low-vol Buchanan mine in Virginia continues to manage operations to match the current weak market environment. The mine is prepared to return to higher production levels, when market demand and pricing rebounds,” CONSOL said.
The company did note that geological issues at the Enlow Fork longwall mine and equipment issues at its Harvey mine, partially offset by outperformance at the Bailey mine, had an impact on costs during the quarter. With 7 million tons of thermal coal produced in the quarter, 6.5 million tons were from Northern Appalachia and 500,000 tons were from the Central Appalachia region.
Looking ahead, CONSOL is projecting Q3 coal production between 7.3-7.7 million tons, with an expected decline from Q3 due to normal miner vacation schedules. Whole year, its annual guidance remains 31-33 million tons.
At the Buchanan mine, Q3 production is expected to range between 750,000 and 850,000 tons, while annual low-vol production is now estimated at 3.4-3.8 million tons, down from previous 2014 guidance of 3.6-4.2 million tons due to continued market weakness.