ARCH - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Arch Resources, Inc. third quarter 2020 earnings conference call. Today's conference is being recorded. At this time, I would now like to turn the conference over to Deck Slone, Senior Vice President of Strategy. Please go ahead, sir.

Deck Slone

St. from morning Good for today. thanks joining and us Louis

While boardroom, that I conducting this the from Arch's morning's call want is spaced. we widely are team to assure you

made remind Before Reform let future Act. Securities statements business may relating you according during performance, expected this financial considered that to we our call, me Litigation certain be begin, and to statements including Private statements forward-looking the

that of more are, those update which like events statements or in to to new over the on your CEO, our turn you of not in expressed results of degrees, COO be measures happy discuss and our statements. Also the the have section we we forward-looking in otherwise, undertake questions. Forward-looking except address Paul by quarterly than CFO. uncertainties, remarks, at the at will this in as this our nature website We by also a morning Matt find plan With actual materially end uncertain. non-GAAP financial posted a file Paul. SEC, participating I that call and press whether are annual After Lang, call matters of take to be which John to statements, release, Investors would may law. described morning's copy be we reconciliation we archrsc.com. I do with our will Giljum, will that, detail result information, our different our forward-looking Drexler, their the of our to some formal required can These future that may be to future our different a reports to the you remind cause as

Paul Lang

to Thanks Deck I time and morning you us today appreciate everyone. the the on join call. taking good

have subsidiaries are begin cases the or workforce COVID-XX complex running a their Arch's me of time. third the well exemplary been required and we below Through challenging fortunate thanks Arch have to entire treatment. national infection for that rates extending the complex extensive efforts quarter, by my none and been Let continued during the average these

While risk service our efforts and themselves, their are ongoing provider. health to we serious workforce operate their unnecessary essential remains the to to large, communities at of employees' coworkers society exposure protect proud any virus as from while continuing a an and our

Even the metric focus addressing the sharp key the pandemic, of have other on and prioritized organization has challenges environmental, the in we maintained also every arena. social as governance our

of the noteworthy the second subsidiary year Neighbor on the following Good community. the more The for outreach Interior's the The in team's Sentinels Good Safety were category. the commitment Sentinels the is Neighbor week efforts principles, and community in local as Neighbor engagement honored contributions to because a captured row awards, marks mine's within won mine the heels its with subsidiaries as And has safety, plant this that the nation's highest mine the Leer an for the distinction positive outreach past As award Award Leer Department Good captured Award, even and these evidence to Safety Leer of Arch's Interior's mine Arch industry. South for Thunder the of Award, well Award Black of receipt this the two of highest of its mining the Department mine XXXX. Safety underground large honor category. in won of the of honor in the Sentinels nation's recognition

nevertheless continuous with our receive it achievements. rigorous internal approach improvement, highest our the for operations those is set gratifying of range full across we drive standards progress in for the ESG external and to to While metrics recognition areas

for foundation South, Leer our ongoing ahead. performance accomplishments a exceptional, this years continued area excellence crucial two we in cornerstone operations, and the Leer have of for strong With of established the

our ESG-related delivered range XXXX made million quarter. for that core we We fronts to the results other of coking buildout solid of progress highly on great on maintained and plan We optimize third South with business the are thermal delivery. Arch to our And completed our a of with operational competitive during aggressively locked-in pricing bond coal coking issuance rate Beyond a achievements, value a finally, forward of a portfolio. tax-exempt the tons moving North broad We X.X support on Leer our strong at American exceptional of execution assets. our proven track coal development.

of fill you Matt plan and to going minutes the final details item, few for our plan a achievements While, momentarily, assets. in the a various to on will these thermal John take I am discuss

start are the Let that U.S. of their as contributions our contributions success. important to thermal we well that have me tremendously saying assets economy decades and as to Arch's by proud growth the for made strong

our River decline the substantial other Leer creating and thermal through initially our flow in a ongoing value last Powder program segments of in cash times, generated have As of free the over more market South. use, that recently buildout environment, course cash years to level we put of many the despite the Basin capital have thermal the return and conveyed four we

keeping new thermal forward well-defined and optimization and are a our are coking phase. pivot for a we with steel assets. driving with careful ongoing clear, However, we coal shifting plan markets, into towards In our

appropriate sale rigorous Put evaluate previously As we effort satisfies for to you exploring we all operations. assuming alternatives accelerated the that already of simply, are find these these assets, some requirements. announced, or strategic our an of launched an buyer could

the such to and we are have transactions over possible. control most enhancing the recent River ultimate fashion evidenced by as Powder mine Basin, production processes we of in value understand in and planning these rates complexities we now we know sales, the manage While closure clearly committed

and in where closure Basin obligations. are plans River we this, with our on footprint to the shrink bonding these mines Given we reduction operations finalizing are our the retirement asset emphasis particular related prioritizing Powder of our

reminder, XX XXXX. in nearly Arch's mines Basin produced expect produce in tons Powder XXXX tons a we River and million XX million less them to As than

reduce allows buyer. we currently are that three in by at in us of XX% of continue a over long to We winding business two way cash operations solution an find evaluating additional could costs the appropriate production unable thermal generate our the right course view We to that the down an event basin to years. this the closure to to plans next in levels fund the term are systematic

which value a long-standing many customer way essential communities of customers of we such, who operate, base providing responsible well As rely communicated for that stakeholders, we a the our path and forward In range creation urgency the clear, established by on we summary, our our the employees, electricity. sharp in for with and most strategy that believe is wide expected stakeholders. a on including coal-based steel control strategy singular metallurgical Arch focus pursue and the and with have markets we to compelling and intend long-term

me on minutes metallurgical the now turning John. Let state before few call to the a spend over markets of

situation. The of recall, deteriorate expected and on As effects will only served exacerbate you the year coal middle steel to coking virus to the knock-on demand of last the onset markets. pricing around the with started the

North bottoming previously of U.S. producers in slow, in to metallurgical for after factors have early today. show XX to which blast a should restarted six from up recovery XX% markets capacity marched the gradual mills time. nearly America, In recently signs idled bolster May is similar. steadily of furnaces XX% instance, Europe, at have in and the markets However, were steel spring, In turn begun steel over story

restart the capacity nearly year. of With the steelmaking half million XX tons of of earlier this idled

led suit, up-and-coming recent is signs coil return improving manufacturing the well, to now margin. back that outlook where PMIs by following months. China globe to levels all by getting with its feet on has up output major is a indicating showing prices a in with exceeding more hot or XXXX is in demand Asia steel economy. acted Moreover, steel expansion wide as XX% across India levels markets rolled of for recent lift prices also This

supply is in also more Arch benefit to dynamics, high to coal than cost rationalization. shuttered the addition production likely U.S. of million that XXXX. are believes XX steel coal In markets to from tons improving likely be coking widespread coking

output in term, and demand supply high profile face reductions. challenges. by were and supply its Other facing relatively Australian coking environment. regions down lead on improving to addition, cuts be near operating similar to rebalancing this to coal of In believe the year is amount an equal In we way an price which looks short, in should

loans gone due uncertainty soft policies. coking virus recent driven with in have to from the In months, the coal stemming import in pullbacks even Chinese already fact, prices

forward. of about excited Let by tremendous, are me business saying the how our close going value creating potential we

strategy, growth constructed high-quality that's completion. proven workforce, logistics ESG a that and in expertise, confident place, metallurgical foundation are clear and we project assets, We product a carefully including and exceptional practices low-cost have slate, a best-in-class marketing industry-leading nearing a talented

While we recovery we trajectory working we come to do aggressively can't make for of it the the market's that. we that just control certain when and can are ready are that does recovery,

cash operational quarter. and for Moving execution, will on the strength during forward, John turn to will in we we with plan and balance I our further performance generation call With as details marketing ESG even leadership, John? that, greater believe the creation sheet which stage on operational ahead value we focus over to set future. for the the South, our Leer and forge

John Drexler

everyone. morning sincere would while I which by the good perform own level remain disciplined one in extensive their virus-related appreciation eight highest families like and impressive, the most begin protocols. is at months continues my in fact the Paul and What's my to communities. employees with to Thanks to and fight, that their team focused Arch expressing into another, the their efforts our view, protect complying

at they cost essential, segment products that $X.X thermal productivity total financial health efforts and do with impacts million the these of at We at estimate metallurgical the $X.X along operation. our the While come million quarter our a and during are cost. safety-related

North dynamics adapted other $XX.XX average our segment ton, below noted, If just highest been our ton market positioning would $XX cost as in fronts as U.S. QX by sever. coal, versus team even a improving American the achieved the cost at Arch the business has report Paul the X.X $XX the year of level economy global again quarter coking during have million price mine we Arch most realities every for well were in marketing that's per on coal well. back our of of at highly the At on total, we producers. execute of in of have quartile coking per In XX% next same tons shipping am per to unit their of ton. gradually As virus, to I fixed the than to to at during the for customers capitalized quarter securing the the also pleased increase continued committed was In North the for ended, ton. of successful steel we when million the metallurgical more the impact American market. first time, above COVID-XX, that to at XXXX not delivery the impact team X.X net tons on quarter a current virus per

our High-Vol-A specifically, in that $XX ton. excess was For per number of product

American While North prevailing levels, time. XXXX that constitutes the premium a to $XX was prices step there market a down to at relative pricing

into directing we with advantage value the But in can't American products keeping North in appropriate in of we in value volumes if customers see know our we all coal As stated the have blends. also option times of American slate of seaborne North we our coking our past, our secure many have the and our the their pricing markets. we the product and relationships market,

and market were and many use North of of fair us premium pay even environment. our the a willing products American this difficult price, value customers Fortunately, in to appreciate

levels vast were With that are the pleased with consistent business volume we for achieved XXXX. concluded, American the North of we that XXXX majority

we volumes that solid leaves provides market-based price our portfolio, where to upside. generate foundation our projected at margins a business open significant see pricing While to healthy it XXXX in the cash a of majority

we premium While with further our we the with those products, advantages portfolio of of pleased high-quality strong execution addition for expand existing we our South. captured to expect Leer are the and the

line quarter, During continued is in finish the sight. the to this on we excellent now make progress transformational well third project and

which to total QX, total budget. for at in midpoint bringing the invested mine, time That's investment we project, and total XX% remains million. million During of the $XXX capital guidance a the of $XX new the roughly on developing required the base of on

in increase High-Vol-A longwall of of production product cash markedly premium we of to commencement the and the coal steel environment. with generating positive into with expect improvement South third the market percentage strengthening the a Leer at With coking that a experience Moreover, average for of our decline could our meaningfully, unit time we to capabilities our step XXXX, in start mix potentially in dynamics believe ramping cost quarter overall the prove gradual the opportunist coal, and both the longwall change. the pricing

Let's our thermal with assets, Powder River operations. now legacy starting turn to our Basin

shifting systematic performance. we strategic these operational reduction As are as Paul a we with into phase a highlighted, explore evaluate alternatives and their assets in new

do Even however, remain and on our third delivered as we so, focused execution generation on during quarter. strong both teams and fronts we PRB those cash the

to the continuing spring cash As half lower thermal off. to our you pay the of rapid fall-off we QX, a match know, to had QX the adjust In first margin structure in adapted in throughout XXXX negative the began we cost the we to had efforts late in demand. and demand as commenced operations

we relative to margin. free our per per and diligence levels to nearly quarter our continue with and cash Combined a are minimal increase level, our CapEx of with a cost As in debt level keeping we beyond. similar ton again QX assets result, maintenance and these that $X expect significant at ton generating continued second achieved cut by in cash in

experienced far and As we negative on heavily margins profitability. our demand again segment, weighing QX, volume both in with levels weak thermal cash

the is focused the and thermal alternatives face cash generate them on and that their to of want term, the to into highly assess to continue our are operations. allowed take these to We we dedication even assets positive recognize longer It ongoing do what as their at to bringing for the more moment be tremendous shrinking worked operations operations succeed challenges they in to effectively of navigate venture commitment I back I a a employees has territory, value for footprint. strategic the continuously than smaller thermal demand and uncertainties applaud recently and continue we pandemic. decade managed successful the more to uncertainties. have be the and know as the joint They environment to a competitive a will position to efforts in they and

cash Looking ahead, to in our we quarter in fourth took from solid shipping expect spring. performance actions coal the benefit cost another of through level. portfolio we expect third Leer coking take to maintain the with coking PRB and momentum that the In portfolio again generating XXXX our good quarter coal which the into and next to expect head South, for the momentum and short, should to startup we the in the capabilities we of

Black adding and by and to Leer teams congratulations close safety me my efforts. Let the Leer, outreach their South community for Thunder

note While we that worked accomplishment. incident, Complex I of and of million truly environmental on like operation, tremendous our to a of are employee and total proud remarkable hours all of two item of performance the safety is Leer all would reportable one a over XXXX the without efforts a

responsibly to Matt performance. the ourselves hold carefully over and to turn conviction and operating call on profitably. our standards a for With will firm as continue of the we operating always, with that high to ESG I to productively thoughts that, Matt? financial all in As areas prerequisite

Matt Giljum

capital quarter good from nearly $XX cash the the of On the JV-related result our totaled million, a settlement of Thanks positive for taxes. and which the and operations including forma needs with cash financing conditions, an FICA our XX environment. land good the million related on from will development a Leer with flows, and maintenance $XX quarter and $XX expenses, exceeded everyone. capital challenging John flows by cash million, in discussion cash a morning increasing deferral Operating pro South weak basis. excluding I as-reported modestly begin levels market June basis, from a despite were third

$XXX other As of the recall, have end at million first these of now identified we the of cash and quarter, approximately we you million items will that and special flow total. $XX collected

the to nearly will XXXX. additional segment. just in metallurgical the an of million expenditures. development the our of spending with $XX million fourth was all Maintenance quarter for land interest. South from remainder, totaled $XX items The from expect these half million continue that and We million $X capitalized of settlement capital related $XX with $XX through substantially million, to Leer $X million was the the quarter benefit Capital first

While be the our part interest it financing project consider we we activity has spending reported a don't capitalized to year. additional become larger cost, a capital undertaken this with of have

third $XX period. the the Regarding the from tax-exempt bond, the made million course as qualifying of proceeds the $XX quarter Leer expenditures on as a expenditures with July reminder, X We we the and received were received offering made million the South. during at remainder closing as are at over

you the more classified slightly XXXX. the cash We fourth have on still our total, that received Of fund in to $XX remainder half receive of which with million to restricted nearly the quarter balance see expect as sheet. in come, be to will than we

Turning with including $XXX the borrowing our remainder cash liquidity, total facilities. to under liquidity. $XXX We quarter million ended the and in million of

While levels, liquidity roughly the collateral reclamation for lower and to primarily was than million obligations $XX requirements June XX modestly due compensation quarter, cash increased during increased surety. workers'

are of post collateral workers' we comp $XX end to legacy self-insured the million associated of after the obligations. required with Additionally, quarter

the term taken the and parties While partners certain the to in and amendments to closely the to dates operations, to under $XXX response longwall reduce outlook on counter were which parties the our the work will to difficult We only XXXX reinforce XXXX. Also accounts accomplishments South of enhanced facility also securitization facilities further market to thermal amendments conditions, of liquidity with our low those liquidity have front, key cost counter minimum inventory to extend maturity continue startup. we surety able required million coal after $XXX our mature set for high-quality million. from be the were Leer and in credit positive Both actions of the one Arch's to for receivable facility. the was August with of the the long inventory quarter

the and overall size expected future of $XX reduced reduced million, still our be current as borrowing size our sufficient by is While the will liquidity facility affected base. receivables the not was for

Our liquidity completion to that financing support of prudent the position continue will the believe our broader be sheet the in and in economy markets light development. Leer building and strongest balance additional uncertainty industry. our will additional the for in we liquidity opportunities remain of the and explore among to We South

taking recorded that address the like quarter. questions, were during to would impairment the Before charges I

Knight in event previously anticipated segment our value our mine our investment in unable in we for will Hawk years, Powder our we sales the in volumes, for winding the Creek we operations. with a thermal discussed, Similarly, systematically a take including Paul will are term As down pricing in find longer thermal and reevaluated shorter in our conditions, lower Coal production and that and availability. other than margins result and it mine light River costs the but demand down capital the assets, life the coal compressed to winding mines buyer Basin. That current begin market will process of several of and and

to that, a due quarter's million. just margins. With you. large in of across these ready will the to capability turn demonstrated volume September over mine At to relation part As plant to back included are Black Black a take cash mine's by impairment million, XX, to this we Operator, ability maintain the equipment call in small for the varied $XXX in book generating the impairment $XXX Thunder totaling value was recorded of The and questions. relatively result, had the I as property Thunder's charges we competitive levels. cost demonstrated assets not

Operator

Pipes Please can from our Instructions] ahead. take Riley first question [Operator We Lucas go now Financial. B. from

Lucas Pipes

for my Thanks taking everyone. morning Good questions. Hi.

Paul Lang

morning Good Lucas.

Lucas Pipes

can quickly the the PRB for thermal again, And set us that Other update know still but Paul. My you the of questions thermal always is alternatives just possibly could really coal there exit difficult, is generated now. margin here business? you other give strategic question on how negative but an Good side Hi. like on EBITDA on morning I is and specifically ton. know I first too, per you this thermal mentioned.

Paul Lang

will about I talk that. Lucas, Yes.

other different on So as At it little it's our two has thermal Elk and both Viper, bit operation. prices the in going you been it's mine-mouth West it's of them, And plant the basically they the with have story. mines, and what's a power serves months, last and look economy is, with the Viper couple down. at

has hurt currently Viper's been the six months. last So for disproportionately in reason that

down, out, I should if generating more market West Pacific interesting market Elk stock some think think when I of Castle. the great product West continue things Viper course of do It's more particularly lot and of we customers it a quality challenging seen. a that. history New as that into history have cash, to get think And great a thermal back great know, is in I export back Japan years, is and kind Now, especially also you I a like normal option, start the the it to than think, than of better will to Elk, that a because that struggles. it has has also it's typically one. normalize has but

same lower with lower sulfur So and the CV value. about ash coal

So smaller time, probably at the little may the it I value. West has a a is great Elk interested, has option is that those same mines say, be of PRB. base different one process a two the people that than would the probably but of

John Drexler

which is pandemic will option move been have forward. XXXX, we perspective, there expected it that streak as give expect we stepped market be of higher the well, the improvement would a that course they where to XXXX for can from as prices Lucas, be into coal, expected it in increase us there give gas as even the we opportunities as natural to to are markets volume with to demand domestically, well, than an in over thermal

positive Elk sure a feel to West working position good here is fairly make about we where going, soon. cash hard to we get So back it

Lucas Pipes

few potential And plan you mentioned And costs of volume maybe And plan the the about from a ultimately scenario? remarks, much reduction could you few over Matt, that asset that years, next very helpful, you this. how the expect over that's for it in on Thank touched in step further, thank years. this your for much. prepared a you color. dramatic the we pursue? how cash PRB, should on But you next kind in think that even we if cash taking Very

John Drexler

Lucas, I With is first. will sure So remarks, think have for have will I declined step thoughts to some things in the of we well am has Thunder, that. in one maybe our the set kind Powder as on of decade, Black others I in here this and the last demand referenced River baseline the Basin.

to operations. have We that responded at our

selling to well and we look tons. go to Black are of under cost timeframe, at cash. that of it produce reposition significant decade, hard million to on mine an XXX at to generate to basis. essentially you that has the If XX Today, was it tons itself back a allowed the entirety amounts annual that to way worked was in continuing million close coal a Thunder Due it

is a opportunities a operation continue today of we going the With forward, responsive from to be forward as shrink we figure the shrink we that seeing responsive our are move the that's are footprint we reclamation market we address to to forward. demand will what obligation need move will and environment look to as to we be shrinking the footprint expectation that to our responsibly here to and have

we as in a hopes meaningful over of And high very have cash so generating have they Thunder to for for Black time continue long history. them our we period

million you nice market stand a forward a look from feel as evaluate to You year to the committed a PRB and as look move next XX what where to we today, be disclosed we good we volume careful level going But environment. there are about our from opportunities. just and in perspective we from approaching we tons we in very

Paul Lang

there, stops, when a only we you we this about to It's CapEx are not replace other we what rolling one would thing is, the maintenance asset. just it. footprint minor the shrink going think to we becoming it, add, keep got look, are is, have going The Lucas thing continuing that's have and I even as to that shrinking with

John Drexler

simultaneously believe generate some for for ultimately use we can mechanism self-funding closure. of Cash we Lucas, sort cash. do we final that could

footprint. So shrink simultaneously generate and the cash

so that the be And will focus.

So how to you do those think do develop footprint we generating can of both what that, on use that we resources, ultimately long-term that degree sort closure you can versus the you simultaneously. shrinking costs, balance do to cash

And so that's really the right hammering plan we out now. are

Paul Lang

the I in Lucas, perfect took example global here is where in think to appropriate pandemic with this year earlier shock demand the an the quarter was enormous And, system steps the to a to there to mine here operation demand that meaningful in generating significant third the that it have reposition itself we make that quarter. sure and was decrease cash to responsive returned and

Lucas Pipes

we are here you that at we the cycle it's it? is of should some this I of for require in. additional maybe say as on in some obligations this also you I XXXX? one know the side job much. difficult in one There the compensation fourth really something is this will third is requirements sneak additional look you Is workers' noted been and good point here that you like Very low collateral it? conversations would would these of And last kind the quarter. could say certain the very Thank quarter, had good. But continue very Good, cost say. to into kind of here you Yes. this Or just or and collateral. in were kind

Matt Giljum

got for side how this a obviously we the of are at met side. the we adjusting is, on what to flip and The first others Lucas, in a frankly, market mentioned, it's demand collateral are and some markets improved the in outside I to I who am surety the Matt. wide thermal cautious that guess, of normal pricing eyed you and clearly they terms quickly new starting little seeing as have maybe deteriorated. of are little looking is of in it, because Yes. all, our partners to and control saying are is this see

today. And Leer to We from from we is have closer about think are operations what to the come post what South costs what there fund a they Arch, stepped are more specifically, shouldn't want frankly surety's the able cost, they sureties high low were when they a counterparty QX. are frankly, up that a quality, the think in much we that these see where than need startup. like And the bit little perspective, given for our due. we to we South, have counterparty lot a going Leer collateral we to that's profile, look We that think as the

that's obviously, So, next can But cash requirements. quality half of the all year. we are to back those things generate reduce will our collateral what the within in that we additional of hopefully any flow And begin think The control. we is what doing. are control meaningfully not

Paul Lang

other would The a I I particularly distinction with thing this add quarter. is, us, it's think

out by Matt Leer when As development JV throughout positive about pointed South $XX the we QX and his cash in we the costs. were in remarks, million sell

come the make to we are going one be I that type that true. can result few of think of

Lucas Pipes

to the speaking of Yes. and I information best forward impressive. luck and again want look soon And That's very to appreciate

John Drexler

Thanks Lucas.

Paul Lang

you Thank Lucas.

Operator

Levin Your ahead. from next Mark comes [Operator Please go Company. question The Instructions] from Benchmark

Mark Levin

Great. very Okay. much. Thanks

model and a questions. the One, of to relates it the other couple picture. more So as quick big then

quarter-over-quarter? also side, would of reason they any volumes modeling XQ they with and process kind to think and you the Should out volume? the thought On when about volumes, of deteriorate sequential accelerate? PRB look met What's why kind you

John Drexler

you It High-Vol-A and look think committed shipped to running essentially the we side the volumes million the our I and as QX the look during So operations met you X.X hard. tons additional look fourth that Mark, million third as the of tons the quarter, in our at imply we at for an operations, would X.X actually commitments on segment met are especially we well. quarter

opportunities So essentially, see to Maybe the probably little a work is, QX. that a to would market hard that's expect But increase that modeling flat see will we be. good to we we place be there to out bit. with real

you again, get a to if a than our in look of levels just rest the run side, volumes On equivalent, PRB. maybe that that's bit year, out rate higher once PRB essentially and you the committed the project little the QX the at

we with challenges converted with PRB of quarter, in into into about some of XXXX volumes the some significant take some that advantages additional We did and had beyond. have but that some We the rail. coal talked last pushback

think PRB I kind rate, modeling the take QX run the So to equivalent place to as of a probably well. be will in

Mark Levin

Mark, And

John Drexler

in well place also to be, we of be We production quarter. costs margin another lot once side first cost And with half into on expect and the would rates did a PRB. adjust in Mark, the as solid good to well-controlled, head QX again, we are as work the should

Mark Levin

be price controlled, will the in costs look to that the it's what still a QX, like Okay. roughly to Got is are similar but because quite price net it. and net and to from, EBITDA volumes if the changing really obviously I don't bit, into but sounds just right? QX would get determinant want as guidance, is the it like will be sequential that

Paul Lang

That's it, in a nutshell.

Mark Levin

when you think impressive Got And then disclosed particularly, pretty Okay. guys some the you about PRB. it. pricing, XXXX, in Perfect.

the rags, at of for look But in tons guys coal forward is to you we disclosed we are go PRB the were see of this you that prices assume well out XXXX? when are the additional what for contract price you guys XXXX, think kind showing $XX. this morning. would you morning, around what in If you were that that of ahead I and terms

John Drexler

am the of market frankly, that commitments, price of to think various tons that, periods. at environment So XX continued mean, committed front to I secure marketing quite challenging a of the has been in of prices million we The time XX very volumes do have million Mark, pleased. what PRB, over I on are attractive. I very the proud are team

So that's an accumulation transactions. of of those all

pricing. I in reflective think the what increase. an especially here There at going Things you right. that probably there as seeing market thermal is expectation where out current what in gas change, the XXXX are to and bit more see core markets can is for is electricity a volumes, are see trade we out generation from today little we sit look of are coal We improvement rags at.

of we sure are as responsible being continue Once market So PRB advantage happening the we but be how operations evaluate going move here. again, are we the to taking will to we what's forward. managing making

Paul Lang

are By are go I just what volume. a just frank. we little and Mark, will under I will Look to weigh chase pressure we bit, not in doing, be greater obviously a out

particularly. got locked-in We a volume If well can will we locked-in. got good have clearly and we good do prices and keeps we have next the pricing survive year dropping,

we are. are We where

in the not we to have what are do past. going done We

Mark Levin

call an a that, or kind bonds PRB? related to Looking propose surety the in PRB scenario without Paul are, the just know the to would out PRB, sale, you down, asset buyer specific, you in and the guys guys when get to CapEx of cash down alluded if for required handicap provide that to versus likelihood sell give you you these get it to of order would we post what you but maybe a surety the I how and the them bonds wind too trying outright have already to guys cash to

Paul Lang

think a control I the lose and they want have don't I the I future liabilities. ability saying, we who not to of an I I and get shareholders mean loosely more importantly, careful is want as in probably and the into to words step define replace What as just just I in where situation buyer. and What about potential opening and do that by to people appropriate start care the into by talking my bonds the script Look, an has leases. of pretty permits someone buyer, appropriate my would will think some asset was take do we the about will our

are out Basin the out And play that buyers in there seen going Powder I have handicap. are do to and not kind River We that. think hard to we there. of It's

and ways. kind out plays been see They As at the non-traditional stand interesting process the over in some basin, to how players in come look this have there But months. it's of have in. different you come back next couple of

Mark Levin

then question whatever the fact, the original collateral would of in market surety back of there it this Matt the nervous Is got more could way and a to Arch amount for sort case And providers maximum Great. provide deteriorates, exposure may be, the if have? Okay. exposure the Lukas' to be, maximum what goes what's is or question.

Matt Giljum

amount think we in that I Mark, I exposure mean surety the So envision. maximum the of theory, either whatever that's the not or the is bonds, something but clearly sureties

Our towards to to operate, operations get underwriting to they the a term long and move closely we to reclamation into. approach ultimately to our sureties exposure going ones step to has how we we how for been are us of assets property that care as them see comfortable take can that them the have work get are with give as they don't the out always them that and are

to going that's be So approach. continue to our

much went environment... through and something history going surety say the needs through total expect in really than bond amount different a case the this we that our that the As we hard to it's restructuring, But were now. much would is smaller be collateral the to

Mark Levin

now, surety the amount bond Matt? is What right

Matt Giljum

about its $XXX reclamation, for total The million.

Mark Levin

Okay. Got it.

Okay.

John Drexler

across whole. the That's

John Drexler

asset retirement obligation of Mark, $XXX that's versus million. more like an

Mark Levin

okay. $XX million,

John Drexler

likely to inflated is is clearly that the long to relative be. So term obligation what very

Mark Levin

Absolutely.

discount of market? as market forward? was your Australian exporters weeks Chinese as are guys you import to And basin characterize recent And I are expectations change have, Okay. traditionally the it. there if circumstances? final the you are Atlantic last Australian policy What handle question. seeing curious Obviously, they Seaborne imports. churn, move try the markets in that. guest on coal? I taking to I have going a with of better kind I prices the got to just even on as a are Or in wanted given on regard how it am you seeing few the into curious then your you would the I change what net though just sort for

John Drexler

Mark, you So are clearly correct.

last We have some to that have here those seen of the hard here in several recently. But over China. policies the prices once are seen policies markets in what the interpret pressure with weeks we again

customers see got see kind while for see cargoes vessels some the of right requesting see are QX that of reselling to physical things all locked-in for playing out we think booking today on market, pressures what will on These into see booking we they of and QX. now as We those QX. acceleration we markets. share cargoes customers We in be vessels pressure have we and these some the ongoing we QX, that of have and see what may seen I things there interest. continue side I is the

into what So being before supply themselves think Chinese strength Chinese as play, expect we demand we strengthening came think around think was we issues returning, see a to will out. the the We was issues the going and continue world with to transpiring with move which play is we market forward. rationalized

we will the quarter us opening is the market. Leer believe strengthening and give we tremendous indicated, a we opportunity As be South what third here of to think here in going

Deck Slone

that restricting believes the short-lived. generally or potentially imports into And hasn't that certainly that, market their policies those when make time indicating going right the to the it's are are to tons there those at lot Really you at look imports of Mark, a quite that Australian SGX, it's look the be when future strip, way Chinese been Deck. for Atlantic frankly, now for basin. And

a I of So Chinese Xiangxi Seaborne price clearly that about is $XX. think, we between economic this the months given certainly is the premium expectation Chinese to that that be there, the a is frankly, a benefit the reset. before of couple is of the landed going and see buyers matter and spread price, the Quite the

certainly that expectation end, sort compete. itself So in can't know. will is out. We that the don't We our

compete can you very would Europe. effectively we imagine, As into

opportunities compete all to that fine. sort But need Europe, we that the Australians seeing at into the will result, time, if And Asia. overflow be with into we, in new itself. will think volumes that's we so same And the end

we we pick already meet It's also to back Once Steel Association Then to up, in rest see of more are that could demand we demand expecting upside from Obviously, others and in step sort last balanced a of interesting encouraged with sort in which have supply demand, the fact approaching the is it than in think otherwise. XXXX, be growth recovered well year's has fully are have expecting market market, of are the World reach of the the and spring about XXXX, and would We of demand in nice had China pace. certainly ahead a to now. But we by that ripping in we for XXXX. think attractive could down a bump the which here rationalized sort XXXX. steel is the way been

see. see we So some do positives are and we encouraged what out there by

Mark Levin

Great. much all very answers. of your for Thanks

Paul Lang

you. thank Mark,

John Drexler

Thanks, Mark.

Operator

Cooperman Please go have we And Capital. from Cobalt more ahead. from Wayne question one

Wayne Cooperman

guys. Hi

to when amounts at the this, missed a you little fund But of and pros kind could having down some I you them on the current basis? a cons run money bit liabilities of what kind continuing about cash and sorry. the the versus of talk on and making rate the So to differences shut thermal are flow business

Paul Lang

static. work that is presume the you with in cash and continually is we the the it, have liability are to described And way control you and obviously very Wayne, that you the market trying occurs. do a declining operation and fashion. better off that back reduce to decline stand how almost certainly are we way taking systematic to it Market the and think we it from logical I flows look, where

Wayne Cooperman

million maybe Was Or all say though to going to you shut you and misinterpret mines? did did I said? what $XXX the cost down was it that

Matt Giljum

That's million. bond and $XXX of cost bonding are those cases actual what won't certainly the in are. mines the It irrespective all to obligations amounts related amount set of our some

to actual arrow the the spend is million. to have based books something reclaim mentioned, of dollars $XXX on Deck our As our will we closer view on to

to be. between spend, manage regulators disconnect got to significant say the we we the of to what obviously, those going two. But are irrespective a needs the have So bond amount

John Drexler

those And it how if we kind into reposition point you million while is, what reclamation I mine of shrinking future footprint. to will And our remember, we would Wayne, looking back Thunder back on the thought this liability configured of existing call $XXX One John a for little would at and shrinking portfolio and went XXXX. a a we we this through is when were we bit Drexler. by were the be thing in we Black the reduced

move So the as at that the reposition hopefully we shrink those going and forward. today, to obligation we forward footprint as we continuing things are here reducing to as over look be once are again move we time,

Wayne Cooperman

pure Does reclamation that just Or liabilities? the include like pension that's other number? and

Matt Giljum

number. That's a reclamation

In associated terms thermal liabilities assets, other the of relatively that are minor. are those with

Wayne Cooperman

Okay. Great. Thanks.

Paul Lang

Wayne. you, Thank

Operator

Lang Paul now turn to call any to remarks. would for like or I back the additional closing

Paul Lang

transformation and towards Thank our the we to to embracing realities and coking pivot taking to that going look products to I to would February. our in participate health high-quality through group to vision that, was everyone. in global going them With industry. our this exposure assets. In the focus a thank steel global continuing producer the can these again a operator, you. this, coal time everyone by is to now Arch achieve our to accelerated call items of like in the Stay interest Arch I and reduction healthy being opposed by industry today forward the of their a and low-cost, socially safe the responsible the we reporting control on to to fighting quarterly spring, crisis. conclude to will thermal we pursuing for is call. new Prior markets as to plan

Operator

today's you. This you for Thank your call. participation. concludes Thank

disconnect. You may now

Arch Resources (ARCH) 22 Oct 202020 Q3 Earnings call transcript