Atlantic Coal clears way for more anthracite output in 2012

Atlantic Coal plc said April 18 that it has completed a long-planned project at its Stockton Colliery in the anthracite coalfields of Pennsylvania to move a Norfolk Southern railtrack aside so it can access new coal reserves.

Completion of the NS diversion allows the working of over 1 million tons of coal of previously unworkable reserves. An independent mining report highlights that, with the diversion complete, production of 160,000 tons of clean coal per year is achievable in 2012, the company noted. Existing equipment provides sufficient capacity to achieve production targets at Stockton, with delivery of a second Liebherr excavator now expected in the second half of 2012.

Atlantic Coal Managing Director Steve Best said, “I am delighted to announce that the railroad at Stockton has now been diverted with the first train traveling over the diversion on Sunday 15 April 2012. With this in place, we can now advance plans to increase coal production at Stockton and at the same time improve efficiency at the site for the remainder of 2012 and beyond. Underpinning this strategy, independent consultants have confirmed that production of 160,000 tons per annum of clean coal at Stockton is achievable during 2012. In calculating this production rate, Mine Engineers Inc. assessed both the mine’s current operational capacity as well as the positive impact of the completion of the rail line diversion. Combined with strong demand and higher prices for Pennsylvania anthracite, we look to the remainder of 2012 with confidence.”

Best noted that the company had recently acquired options over two prospective anthracite projects and is currently conducting due diligence on those assets. Further updates will be made at the appropriate time, he added.

On Jan. 3, the company announced that it had entered into a lease option agreement with Reading Anthracite Co., an established operator in Pennsylvania’s anthracite coal industry, over the fully-permitted, 410-acre Pott & Bannon anthracite mining property in New Castle Township, Schuylkill County. Also, on Feb. 15, the company announced that it had entered into an option agreement to acquire additional anthracite mining assets in Pennsylvania.

The new projection of 160,000 tons of clean coal production for 2012 would represent a considerable improvement on the 106,403 tons of production of clean coal achieved in 2011. The projected 2012 strip ratio of 17:7 set out in the independent mining report beats the 2010 and 2011 strip ratios of about 32:1, leading to a significant increase in operating efficiencies at Stockton.

Production at Stockton increased 12% to 31,729 tons of clean coal during the first quarter compared to 28,376 tons in the year-ago quarter. Demand for Stockton’s high quality anthracite remains strong with production from Pennsylvanian anthracite mines struggling to meet demand, Atlantic Coal noted. As a result there has been a substantial increase in the average sale price of Pennsylvanian anthracite with a first quarter 2012 average price of $166.30/ton compared with a first quarter 2011 price of $134.25, an increase of about 24%.

The Stockton strip mine in Luzerne County is listed with the U.S. Mine Safety and Health Administration under Atlantic Coal’s Coal Contractors (1991) Inc. unit. MSHA data shows production of 100,943 tons in 2011 and 88,278 tons in 2010.

Atlantic Coal’s stock is traded on the London Stock Exchange’s Alternative Investment Market (AIM: ATC) and the OTCQX Market (OTCQX: ATCLY).

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.