Kentucky-based Rhino Resource Partners LP (NYSE: RNO) said July 10 that its various operations in Appalachia and Utah saw mixed results during the second quarter, with some Central Appalachia operations getting a restart on July 9.
- Northern Appalachia: These operations, located in Ohio, produced 477,000 tons of steam coal during the second quarter. Coal sales were 476,000 tons and limestone sales totaled 128,000 tons. With Rhino’s Hopedale sales fully contracted through 2014, Rhino said it has had discussions with some of its Hopedale customers about extending deliveries in order to provide a better match between current production and sales volumes.
- Central Appalachia: During the quarter, Central Appalachia operations produced 171,000 tons of steam coal and 99,000 tons of metallurgical coal. Met coal sales totaled 109,000 tons and steam coal sales were 218,000 tons. During June, the bulk of Rhino’s Central Appalachia operations were idled to reduce excess inventory, primarily of met coal. During the month, overall inventories were reduced by about 75,000 tons and are now close to targeted levels. Production at the idled operations resumed on July 9. There was a pickup in met sales activity during the quarter, with 30,000 tons sold on a spot basis as a low quality met product. Rhino’s steam customers have generally been taking contracted deliveries.
- Rhino Western: Rhino’s Castle Valley deep mining operation in Utah produced 220,000 tons and sold 251,000 tons during the second quarter. During June, Castle Valley had its first 100,000-ton plus sales month since Rhino began operations here, allowing this operation to reduce coal inventory by about 32,000 tons.
- Eastern Met: Rhino Eastern, a joint venture with newly-bankrupt Patriot Coal (NYSE: PCX), produced 98,000 tons of met coal during the second quarter and sales were 92,000 tons. Rhino Eastern’s new Eagle #3 deep mine is prepared for production pending final regulatory approval. At full capacity, Eagle #3 is expected to produce at a rate of approximately 490,000 tons per year. “While the impact of the Patriot Coal Corporation bankruptcy filing on the Rhino Eastern joint venture is uncertain at this point, Rhino expects the joint venture will continue normal operations and does not expect the bankruptcy filing to have a material negative effect on Rhino Eastern,” Rhino added. Basically, Rhino provides the mining while Patriot provides the coal cleaning services.