CONSOL reports higher coal output, completion of Bailey upgrades

CONSOL Energy (NYSE: CNX) said July 15 that its Coal Division produced 13.8 million tons for the second quarter of 2013, including 1.2 million tons of low-vol coking coal from the company’s Buchanan longwall mine in southwest Virginia.

Both production figures were slightly above previous guidance provided last quarter. Although second quarter sales at Buchanan were higher than expected, low-vol prices weakened as the quarter progressed.

During the second quarter of 2013, CONSOL’s total coal inventory decreased by 47,000 tons to 917,000 tons as of June 30, which marks a new 15-year low inventory level. Thermal coal inventory decreased by 102,000 tons to 773,000 tons during the quarter, as customers continued to take all contracted tonnage. Low-vol coal inventory increased during the quarter by 55,000 tons, to 144,000 tons.

CONSOL expects third quarter 2013 total coal production to be between 13.4 million – 13.9 million tons. Annual 2013 total coal production guidance is 55.5 million – 57.5 million tons. Buchanan’s third quarter production is expected to be between 0.7 million – 0.9 million tons, while annual production guidance remains at 4.0 million – 4.2 million tons.

CONSOL’s Coal Division saw safety exceptions flat in the second quarter of 2013 compared to the same quarter of 2012. In the area of compliance, CONSOL’s Coal Division saw violations decrease by 16% compared to the year-earlier quarter.

The Bailey Preparation Plant, which handles coal from both the Bailey and Enlow Fork longwall mines in southwest Pennsylvania, has successfully upgraded the existing control room with new computers, operator screens, and the required software and hardware to support the increased plant capacity from 6,300 tons per hour (tph) to 8,200 tph. Also, the Bailey clean coal handling system installed, and placed into operation, a new dual batch loadout facility that will increase the capacity of loading unit trains to 9,000 tph, which is a 50% increase from the previous unit that had a loading capacity of about 6,000 tph. These continuous improvement projects are in anticipation of starting production at the BMX Mine on April 1, 2014. BMX is basically a third longwall for the Bailey mine.

CONSOL Energy will report additional operational and financial results for the quarter ended June 30, 2013 at 7:00 a.m. ET on July 25, followed by a conference call at 10:00 a.m. ET.

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.