Alpha turns from loss to profit in 2021 by focusing on metallurgical coal | WJHL
BRISTOL, Tenn. (WJHL) Alpha Coal’s transition to selling metallurgical coal almost exclusively yielded big dividends for the Bristol-based mining company in 2021, as annual net revenues grew by half a billion dollars compared to 2020.
Alpha, which changed its name to Alpha Metallurgical Resources (AMR) last year, reported net revenue of $289 million for 2021, including net profit of $255 million in the fourth quarter alone. This compares to a net operating loss of $241 million for the full year 2020 and an overall net loss in 2020 of $447 million when discontinued operations are taken into account.
In addition to being headquartered in Bristol, Alpha operates two underground mines in Dickenson County, Virginia and two surface mines in Wise County, Virginia.
In a press release, CEO David Stetson said 2021 “is truly a transformative time for our business.”
AMR sold $827 million worth of coal in the September to December 2021 quarter, almost all metallurgical (met) coal – a high-grade variety used primarily in steel production. That was more than double the revenue for the same quarter a year earlier.
For the full year, coal revenues were $2.25 billion, a 59% increase from $1.41 billion in 2020. Tons sold were 16.8 million in 2021 compared to 15.5 million in 2020.
RAM transformed since a 2018 merger with Contura Energy. At the time, the companies planned a merged entity that would divest some of its assets, but would still include both “a leading U.S. metallurgical coal platform and a competitively priced thermal coal portfolio,” according to a April 2018 press release announcing the planned merger.
The Contura name was maintained following this merger, but as the thermal coal assets were sold, the the company announced a name change in early 2021. It was part of what Stetson called “a series of important steps in cementing our role as a leader in metallurgical coal and in cementing our role as America’s largest coal producer.”
The 2020 and 2021 blends of met coal versus thermal coal show the change. In 2020, the company sold 2.4 million tonnes of “other” coal to 13.1 million tonnes of met coal. The “other” category in 2021 fell by almost half to 1.3 million tons, while sales of delicacies increased to 15.6 million tons.
The demand for satisfied coal gave some life to the Southwest Virginia mining industry. Coal mined in central Appalachia is bituminous, with low sulfur and ash content and high heat content, making it desirable for metallurgical use.
In the fourth quarter, the 3.8 million tons of mixed AMR coal sold earned an average of $180.66 per ton, compared to $62.56 for the much smaller amount of thermal coal sold. Thermal coal is typically used in power plants.