With higher-than-expected coal sales (16.7 million tons) at higher prices, CONSOL Energy reported record quarterly sales of $1.4 billion. “Our coal and gas operations continued to show improved results in safety, with incidence rates down 28% from the year-earlier quarter,” said Brett Harvey, CEO. “We also exceeded our expectations on coal production. Our sales team sold a record 1.1 million tons of Bailey coal into the high-vol coking coal market. We also locked in additional low-vol Buchanan tonnage at an annual equivalent price of $290 per metric ton FoB.”
With the rapidly improving market for the met coal, CONSOL Energy has decided to reopen its idled met coal complex in Amonate, Virginia. That mine has 240 million tons of met reserves. The company believes that, with less than $100 million in capital expenditures, it can re-open the mine with two continuous miners in the next nine months and produce approximately 400,000 tons in 2012. Two additional continuous miners could be added toward the end of 2012. Production could ramp to 800,000 t/y by 2015.
Because of the continued growth of CONSOL Energy’s coal export business, and recent international developments, the company has decided to expand the capacity of its Baltimore Terminal by 2 million t/y, to 16 million t/y. The company expects to upgrade its rail infrastructure at a cost of about $10 million. The additional rail capacity is expected to be on line in the third quarter of 2012. Additional detailed engineering studies have commenced to determine the feasibility of expanding the terminal beyond the 16 million t/y figure.