In the Powder River Basin, Arch’s Q4 shipment levels fell by more than 15% from Q3 owing to rail service issues on the Joint Line. Q4 shipments were impacted as Arch’s current mix of sales contracts skews more heavily toward customers using the rail operator with the majority of the shortfall.
Arch officials said the shipment shortfall had a predictable increase in Q4 unit costs in the region, while lower-than-expected Q4 shipments pushed 2013 thermal volumes below previous expectations.
However, “we would expect to make up a majority of those shipments during 2014 as rail service improves,” CEO John Eaves said.
Arch encountered challenging geologic conditions in the current longwall panel at the Mountain Laurel complex in Appalachia as company officials previously announced. Consequently, the mine’s 2013 production decreased by 40% from Q3 levels, leaving Arch’s full-year 2013 metallurgical coal sales volumes slightly below previous expectations.