BRISTOL, Tenn. (WJHL) Alpha Coal’s transition to selling metallurgical coal almost exclusively paid big dividends for the Bristol-based mining company in 2021, as annual net revenues swung by half a billion dollars compared to 2020.
Alpha, which changed its name to Alpha Metallurgical Resources (AMR) last year, reported net revenue of $289 million for 2021, including a net profit of $255 million in the fourth quarter alone. That compares to a full-year 2020 net loss of $241 million from operations and an overall net loss in 2020 of $447 million when discontinued operations are factored in.
In addition to being headquartered in Bristol, Alpha operates two underground mines in Dickenson County, Va. and two surface mines in Wise County, Va.
In a news release, CEO David Stetson said 2021 “was truly a transformational time for our company.”
AMR sold $827 million worth of coal in the September-December 2021 quarter, almost all of it metallurgical (met) coal — a high-quality variety used primarily in steel production. That was more than double the revenue during the same quarter a year earlier.
For the entire year, coal revenues were $2.25 billion, an increase of 59% over 2020’s $1.41 billion. Tons sold was 16.8 million in 2021 compared to 15.5 million in 2020.
AMR has transformed since a 2018 merger with Contura Energy. At the time the companies foresaw a merged entity that would divest some of its assets but still include both “a premier U.S. metallurgical coal platform and cost-competitive thermal coal portfolio,” according to an April 2018 news release announcing the planned merger.
The Contura name was maintained following that merger, but as thermal coal assets were sold off, the company announced a name change in early 2021. That came among what Stetson called “a series of important steps in solidifying our role as a leading pure-play metallurgical coal company and building on our role as the largest U.S. met coal producer.”
The 2020 and 2021 mixes of met versus thermal coal show the shift. In 2020, the company sold 2.4 million tons of “other” coal to 13.1 million tons of met coal. The 2021 “other” category dropped by almost half to 1.3 million tons, while met sales increased to 15.6 million tons.
Demand for met coal has given some life to Southwest Virginia’s mining industry. The coal mined in central Appalachia is bituminous, with low sulfur and ash content and high heat content, making it desirable for metallurgical use.
In the fourth quarter, the 3.8 million tons of met coal AMR sold brought an average of $180.66 a ton, compared to $62.56 for the much smaller amount of thermal coal it sold. Thermal coal is typically used in power plants.