TORONTO (miningweekly.com) – US coal producer Corsa Coal has narrowed its first-quarter net loss to $8.29-million, up from a loss of $25.62-million in the comparable quarter ended March 31 a year earlier, despite falling sales and revenues.
The company believed that January marked a 12-year bottom for metallurgical coal prices and that renewed infrastructure spending and the effects of metallurgical coal production cuts would cause prices to recover to a point on the supply cost curve where producers were cash-margin positive again.
Canonsburg, Pennsylvania-based Corsa advised that spot prices for metallurgical coal rose 10% over the course of the first quarter and were up about 25% so far this year.
With an open sales position and the ability to increase production as the year progresses, Corsa expected to immediately benefit from these increases in prices for metallurgical coal.
Corsa reported that its Northern Appalachia division (NAPP), which was mainly focused on metallurgical coal production in Pennsylvania and Maryland with sales in North America, Europe, South America and Asia, secured a new thermal coal sales order that brings its committed and priced production up to 70% for 2016.
Its Tennessee-based Central Appalachia division (CAPP), which was focused on thermal and industrial coal production in the Central Appalachia coal region, with sales in the south-eastern region of the US, had substantially completed the mine development for the Cooper Ridge Deep, which was expected to strategically reposition CAPP into the specialty coal and industrial coal markets, which typically generate premium pricing.
During the period, NAPP cost-reduction efforts were successful in driving down the cash production cost per ton sold for metallurgical coal by 18.2% year-on-year, from $76.09 to $62.23. CAPP cost reduction efforts were also successful, with costs driven down 20.8% year-on-year from $61.96/t to $49.05/t.
Revenue during the quarter fell 47% to $16.61-million, as total sales fell 30% year-on-year to 248 000 t.