CONSOL Coal Resources LP operates as a leading producer of high-quality bituminous coal, which focuses on the extraction and preparation of coal in the Appalachian Basin due to its ability to efficiently produce and deliver large volumes of high-quality coal. The company operates as a subsidiary of CONSOL Energy Inc. CONSOL Coal Resources GP LLC serves as the general partner of the company.
As of December 31, 2020, the Pennsylvania Mining Complex (PAMC) controlled 657.9 million tons of high-qua...
CONSOL Coal Resources LP operates as a leading producer of high-quality bituminous coal, which focuses on the extraction and preparation of coal in the Appalachian Basin due to its ability to efficiently produce and deliver large volumes of high-quality coal. The company operates as a subsidiary of CONSOL Energy Inc. CONSOL Coal Resources GP LLC serves as the general partner of the company.
As of December 31, 2020, the Pennsylvania Mining Complex (PAMC) controlled 657.9 million tons of high-quality Pittsburgh seam reserves, enough to allow for more than 20 years of full-capacity production. In addition, the company owns or controls approximately 1.5 billion tons of Greenfield Reserves located in the Northern Appalachian Basin (NAPP), the Central Appalachian Basin (CAPP) and the Illinois Basin (ILB).
The company’s production from the Bailey, Enlow Fork and Harvey mines can be sold domestically or abroad, as either thermal coal or high volatile metallurgical coal. Its onsite logistics infrastructure at the Central Preparation Plant includes a dual-batch train loadout facility capable of loading up to 9,000 tons of coal per hour and 19.3 miles of track linked to separate Class I rail lines owned by Norfolk Southern Corporation (Norfolk Southern) and CSX Transportation Inc. (CSX). These mines and their logistics infrastructure, along with the company’s 100%-owned CONSOL Marine Terminal, which is served by both Norfolk Southern and CSX, will allow the company to continue to participate competitively in the world’s thermal and metallurgical coal markets. The company has also begun development production from its Itmann Mine project and are starting to explore and invests in some innovative and sustainable uses for coal.
The company’s core businesses consist of its:
Pennsylvania Mining Complex: The PAMC, which includes the Bailey Mine, the Enlow Fork Mine, the Harvey Mine and the Central Preparation Plant, has extensive high-quality coal reserves. The company mines its reserves from the Pittsburgh No. 8 Coal Seam, which is a large contiguous formation of high-Btu coal that is ideal for high-productivity, longwall operations. The design of the PAMC is optimized to produce large quantities of coal.
CONSOL Marine Terminal: Through the company’s subsidiary CONSOL Marine Terminals LLC, it provides coal export terminal services through the port of Baltimore.
Itmann Mine: Construction of the Itmann Mine, located in Wyoming County, West Virginia, began in the second half of 2019; development mining began in April 2020, and full production is expected upon the completion of a new preparation plant. When fully operational, the company anticipates approximately 900 thousand tons per year of high-quality, low-vol coking coal capacity.
Strategy
The company’s production from the Bailey, Enlow Fork and Harvey mines can be sold domestically or abroad, as either thermal coal or high volatile metallurgical coal. The key elements of the company’s strategy are to selectively grow its business to maximize shareholder value by capitalizing on synergies with its assets and expertise; and continue to grow its share of coal sales to top-performing rail-served power plants in its core market areas, while opportunistically pursuing export and crossover metallurgical opportunities.
Detail Coal Operations
Recoverable Coal Reserves
As of December 31, 2020, the company had an estimated 2.2 billion tons of recoverable coal reserves. As of December 31, 2020, the PAMC included 657.9 million tons of recoverable coal reserves that are sufficient to support more than 20 years of full-capacity production. The company’s recoverable coal reserves include 81.3 million tons of undeveloped reserves that are classified as high-vol, mid-vol or low-vol metallurgical coal.
Pennsylvania Mining Complex
Pennsylvania Mining Complex: The Pennsylvania Mining Complex is located in Enon, Pennsylvania and consists of three deep longwall mining operations, the Bailey Mine, the Enlow Fork Mine and the Harvey Mine, and a centralized preparation plant. The PAMC typically operates 4-5 longwalls with 15-17 continuous mining sections. The annual production capacity of the PAMC is approximately 28.5 million tons of coal. The PAMC's on-site logistics infrastructure at the central preparation plant includes a dual-batch train loadout facility capable of loading up to 9,000 clean tons of coal per hour and 19.3 miles of track linked to separate Class I rail lines owned by Norfolk Southern and CSX.
Bailey Mine: As of December 31, 2020, the Bailey Mine’s assigned and accessible reserve base contained an aggregate of 108.2 million tons of clean recoverable coal with an average as-received gross heat content of approximately 12,900 high-British thermal units (Btus) per pound and an approximate average pounds of sulfur dioxide per million British Thermal units (mmBtu) of 4.42. The Bailey Mine is the first mine developed at the Pennsylvania Mining Complex. For the year ended December 31, 2020, the Bailey Mine produced 8.7 million tons of coal.
Enlow Fork Mine: As of December 31, 2020, the Enlow Fork Mine’s assigned and accessible reserve base contained an aggregate of 321.7 million tons of clean recoverable coal with an average as-received gross heat content of approximately 12,940 Btus per pound and an approximate average pounds of sulfur dioxide per mmBtu of 3.35. The Enlow Fork Mine is located directly north of the Bailey Mine. Initial underground development was started from the Bailey Mine while the Enlow Fork slope was being constructed. For the year ended December 31, 2020, the Enlow Fork Mine produced 5.7, 10.0 and 9.9 million tons of coal.
Harvey Mine: As of December 31, 2020, the Harvey Mine’s assigned and accessible reserve base contained an aggregate of 228.0 million tons of clean recoverable coal with an average as-received gross heat content of approximately 12,950 Btus per pound and an approximate average pounds of sulfur dioxide per mmBtu of 3.89. The Harvey Mine is located directly east of the Bailey and Enlow Fork Mines. Similar to the Enlow Fork Mine, the Harvey Mine was developed off of the Bailey Mine’s slope bottom. For the year ended December 31, 2020, the Harvey Mine produced 4.4 million tons of coal.
Itmann Operation
Itmann No. 5 Mine: The Itmann No. 5 Mine is located in Wyoming County, West Virginia, approximately 2.5 miles northwest of the town of Itmann, WV. As of December 31, 2020, the Itmann Mine's assigned and accessible reserve base contained an aggregate of 20.6 million tons of clean recoverable coal, enough to allow for more than 20 years of full-capacity production. For the year ended December 31, 2020, the Itmann Mine produced 25 thousand tons of coal. The company is evaluating plans to develop a dedicated coal preparation plant to process and handle the Itmann Mine's production.
Production
In the year ended December 31, 2020, 99.9% of the company's production came from underground mines equipped with longwall mining systems (PAMC).
Coal Contracts
The company sells coal to an established customer base through opportunities as a result of strong business relationships, or through a formalized bidding process. Of the company’s 2020 sales tons, approximately 60% were sold to U.S. electric generators, 38% were sold to export markets and 2% were sold to other domestic customers. Of the 38% of the company’s 2020 sales tons sold to export markets, 18% were sold in the metallurgical market and 82% were sold in the electric power generation and industrial markets. In 2020, the company derived greater than 55% of its total coal sales revenue from its top three customers. As of January 1, 2021, the company had multiple sales agreements with these customers that expire at various times in 2021 through 2023.
Terminal Services
In 2020, approximately 10.1 million tons of coal were shipped through the CONSOL Marine Terminal owned by the company’s subsidiary, CONSOL Marine Terminals LLC. Approximately 77% of the tonnage shipped was produced by the Pennsylvania Mining Complex. The CONSOL Marine Terminal has significant storage capacity of 1.1 million tons with more than thirty acres of capacity for stockpiles. The facility possesses extensive blending capabilities; and has handled approximately 11.5 million tons of coal per year on average over the past five years, with a potential maximum throughput capacity of approximately 15 million tons annually.
Seasonality
The company’s business has historically experienced limited variability in its results due to the effect of seasonal changes.
Laws and Regulations
The federal Clean Air Act (CAA) and corresponding state and local laws and regulations affect all aspects of coal mining operations, both directly and indirectly. The CAA directly impacts the company’s coal mining operations through permitting and emission control requirements for the construction or modification of certain facilities. Indirectly, the CAA affects the U.S. coal industry by extensively regulating the air emissions of coal-fired electric power generating plants or other industrial facilities operated by the company’s customers.
The federal Clean Water Act (CWA) and corresponding state laws affect the company’s coal operations by regulating discharges into certain waters, primarily through permitting. CWA permits - issued either by the EPA or an analogous state agency - typically require regular monitoring and compliance with limitations on defined pollutants and reporting requirements. Specific to the company's operations, CWA permits and corresponding state laws often require treatment of discharges from coal mining properties for non-traditional pollutants, such as chlorides, sulfates, selenium and dissolved solids; and requirements to dispose of produced wastes at approved disposal facilities.
The company’s active operations are located in states which have achieved primary jurisdiction for enforcement of the federal Surface Mining Control and Reclamation Act (SMCRA), with oversight from the U.S. Office of Surface Mining (OSM). The company is required to comply with other state, federal and local environmental laws. These laws include the Safe Drinking Water Act, the Emergency Planning and Community Right to Know Act, the Toxic Release Inventory, and the rules governing the use and storage of explosives regulated by the U.S. Bureau of Alcohol, Tobacco, and Firearms and the Department of Homeland Security.
History
The company was founded in 2015. The company was formerly known as CNX Coal Resources LP and changed its name to CONSOL Coal Resources LP in 2017.
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