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Arch scales back thermal coal production

Major U.S. coal producer Arch Resources has significantly scaled back production at its mines in Wyoming in response to weakening demand, according to a report by The company reported output at its Coal Creek mine plunged 39% from 3.8 million tonnes in 2022 to 2.3 million tonnes in 2023.

Another coal mine Black Thunder, which is also in the Powder river Basin, saw production dip 2.6% to 60.6 million tonnes last year. Arch expected just 50-56 million tonnes of coal output from its Powder River Basin operations in 2024, a weak forecast compared to what was mined last year.

“The thermal coal outlook is weak with Arch’s sales guidance coming in below committed volumes from utilities,” said Lucas Pipes, an analyst at B Riley Securities. Electric utilities are retiring coal-fired power plants in favor of natural gas.

Reflecting its declining role, Arch completed $15.9 million in reclamation work on its Wyoming mines in 2023. The company has accelerated closure plans for Coal Creek and Black Thunder, which it first announced in 2020. Arch’s reclamation fund for the Powder River Basin is now fully funded for decommissioning.

Local officials in Campbell County, where Coal Creek is located, have been working with Arch to transition the site to an industrial park and cushion the economic blow of mine closures. While Arch continues to extract coal from Black Thunder for cash flow, production is tapering off and reclamation is advancing. The actions show how plummeting demand is pushing top US coal miners to rapidly scale back thermal mining operations and rehabilitate sites, marking a significant shift away from coal in America’s power industry.

For 2023, Arch reported profit of $464 million on revenue of $3.1 billion versus year-ago profit of $1.3 billion on revenue of $3.7 billion.

Source: Sxcoal