ARCH - Earnings call transcript Q1 2021

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Operator

Good day, everyone. Welcome to the Arch Resources, Inc.

First Quarter 2021 Earnings Conference Call. Today's conference is being recorded. And now I would like to turn the conference over to Deck Slone, Senior Vice President of Strategy. ahead. go Please

Deck Slone

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

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

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

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

Paul Lang

join world at Thanks quarter operating the pleased team industrial here earnings precision ways. good quarter was the start efficiency the glad the natural a of again, know and we usual class the impacts everyone. report lingering in is execution, in Deck that Arch all could tough right Once first to day to this with to and a to spaces. related very the you I'm busy morning, on as commitment its us morning the demonstrated what pandemic. We're and resource business despite

while performance South, performance several additional so than Leer's don't trim go that we're it expected, available, That progressed coking coal the our the cash ways operations culminating Leer reiterate, the Leer cost and at represent March. cost potential will coking performance to As A Leer High-Vol South and of generating the more excited coal driving a I'm intensely startup South strongly became expect breakout development impact continues underscores more strong the ratable coking by gate than per pleased steadily confident match we again startup longwall expect than in quality cost dollars our less volumes our reach widely significant We're Even competitive we exceptionally pure commissioning new do immediately. segment improved than than another about South play an the efficiencies. cost down to out to coking on the coking and the believe improve Leer well. the cost our expect core it We also at yet and about the with a as it world's new from of vaccine structure very absolutely as bring ever why reduce continues by to the same $XX away XX%, and Leer impending we has quarter at anchored the as achieved with of approximately it coal to coal an report ton identify up retch which months work overtime. coal average transition capabilities. to quarter to supplier mine Leer average to from total we at mine final position coking the our less will coal the cement leading performance our for have cost coking boost the transformational strong Moreover longwall producer. more step our coal. ton, into volumes ongoing To few Leer per by the we're our average just its

As as buyer for the we a strategic our the same with will alternatives sale our potential for even explore responsible that clean the only time, assets. if thermal stipulation previously announced, move explore meet to perspective transaction. the and can continue of sale those clear forward we legacy assets requirements with rigorous At

drive and strategy and continue to obligations a two forward flows down - final reclamation bonding optimizing of We an our cash with prong working accelerated fashion. their in

moving achieving while During segment aggressively the a mine. solid margin closure our the first thermal fronts quarter Coal in accelerated of both our progress good made with ahead we Creek on

asset plan our As vast the previously work discussed, retirement XX% to million $XX Coal Creek Powder the represents majority the mid-XXXX. of River down in total Creek obligation Basin or liability Coal approximately of by and we

approximately the by work Creek During Coal quarter million. made the in ARO we performing to that excellent start first $X necessary effort reduce

another strategic we to to Shifting quarters, million. total obligation Over to facet critical reduce by transition. mines another million $XX of the $XX next expect the five our

to strengthening also We social in our refining, governance important commitment advancing quarter performance. progress environmental, and longstanding made and the during

business success in move to that. do to times our that in many is multiple past, just strategy aligning our believe stated with we on fronts the continue to evolving forward we the we world essential As priorities and the long-term ESG

safety that with deep excellence we commitment high our and unwavering to bar for this and course to Of a and arena. continue set Arch, begins in

incident and average. industry During our than average times roughly was XXXX rate the first time better better the XX% quarter loss leading our four than national

be during X our but environmental continuing products. down in lower score reduction group ISS the value, achieving carbon targets the Arch top In decarbonization. for keeping realign global Scope its world shift keeping and ESG for X turbines peer science-based and our which conform reported focus addition, given such tools metallurgical two the quarter vehicles. focus of degree Celsius continue towards of systems, decarbonizing amount significant to new infrastructure essential And value and and continued reflect equivalent mass to in transit steel XX% are electric our our to significant wind higher the development our in believe build gas decarbonization greenhouse in we've a construction our since markets future. out targets required first we deductions Most all intensifying intensified and volume Moreover our Scope to dioxide will with urbanization, that efforts importance in with we economies disclosure a emissions, strategic on We XXXX steels perhaps, emissions proposition on as sealed of our category.

some pass John for comments operational I to the our call Before performance. additional about

coal me a minutes Let on what the spend markets. few in we're seeing coking currently

in in would First, customers The production. continuing based weeks. this supportive steel our remained metallurgical own from constructive markets coal to you expect region. force East our committed every experience let say US behind volumes as resurgence recent me global be yet in strong interest major the on solidly strong driving is in tone with

coking levels sit these weeks. overall including is all per which at $XX Steel Steel demand as factors key markets seaborne major premium needs. prices the ton output healthy Chinese market on a direct as satisfy advantage pent are for $XX returning highs. to on up US here this to Australian soon coal import markets have being experience the today, mill believe historic in assessment East steel to importing even a we enjoy appears to coal to drag be Coast markets this continue quality by remain exerted solid to backdrop rebounded levels the course recent our in on As countries current policies. merited year. is pre-pandemic metallurgical and capacity to based seaborne Moreover entirely to recover India coals we price coking with in Clearly,

been continues in restriction. ideal given great In into to blend. for Leer specifically when able addition US a Chinese import which our value generally is interest this use expand integrated marketplace coals the to brand believe its a to an there lining we and in Mainly, silver we've fit be

the we our second growth half the have valuable get that additional In this source of One of sign which into steel we to market the and in inked sharply inroads XX% believe commitments me strong. the our is strategy clear creation. reiterate than more and the supply. executing focused on actionable let ultimately or we know closing, remained yet all in remain availability second world's deliver for value given year limited We into or as Chinese we While of interest for Chinese deals made not. such quarter.

expecting infrastructure as a year. future what supported forward as With steel and industry growth for high with value new details remain shareholders. project. well slate, stimulus this shifts quality to the cultivated demand ESG to the build gear our resumes. Drexler call our expect the for the recovery foreseeable global along drive further base product on carefully the positioned With balance assets, well economy I'll the believe the as efforts our low performance cost and John? best-in-class for long-term driven operational over in low the out as a quarter that of We of We turn metallurgical Arch carbon march now well the John during high profit in first customer leading to as we're environment for is performance,

John Drexler

begin everyone. want managing our Paul has put tremendous Thanks morning, to COVID. and efforts recognizing again good I once by forth team the in

experienced decrease infections expanding the drive related our employee clinics to process the the large vaccination As over vaccine, engaged To increase to the about of worked quarter of to to at vaccine. established streamline logistics we the of our the number included quickly part rapid conducting and indicated, at in access the and vaccine incentives our a several the due vaccine the process with we COVID which of employees benefits uptake, availability operations course mines. to in dramatic

which are cases is these our at decease contributed operations. We pleased rapid in to efforts significantly the of with to-date believe success the we

We our work who continue are employees to higher. of the percentage drive to still vaccinated

to As underscored report mission just Arch's highest platform. front this the expansion I'm strategic single we've objective. today as has in coal ended yet multiple and stated coking pleased class quarter remains Paul on exceptional focus in we of during critical support world progress that our again many times past the of made the

the ongoing work grows is the ever noted exceptionally overt at further Paul closer. the to as three longwall months metallurgical South elevate it course our an and and commissioning business South Of was example Leer as of eventful transformational Leer at the efforts our of ongoing

the the of point. shape We've fact completed to major development here final my of the system have forward In drive Most panel in the line. many on longwall time begin on including As of personal us kept project room challenges initially longwall we preparation is and XXX the distractions the period the has on completed the get work accompanied the exceptional set of the other global that team shields. on the we be we and all, nearly to and moving has two first sit operations in to the the all as the work where work longwall the mantrips commenced taken opinion deployed. excellent years the a today, underground rail this end obstacles, locomotives, including possession of We've We've little all infrastructure proud budget in the a of just the hauling pandemic. over longwall in finish panel. up short, team impressive at I'm system the equipment will successfully the and we've face we're on work done plan. that of enormously delivery taken

we're course well for still great But in quarter deal and shape on Of mid-third a track do. start there's up. to excellent

the the to underground upgrade next and place. several the weeks, about underground and accommodate mines and in on step the belts system, of rail the to layover of take the room miles is that Over will slope be longwall volume up deployment set-up huge completing line we five begin motors the

second As previously a to quarter. will result scheduled and the discussed, effective the this and in to all start is a slope to in bring successful the XX-day To conclusion work up. occur smooth a at facilitate mine which work outage late

advantages identical and the Leer nearly are experience expertise that proximity course taking of the to adjacent in full many respects in and one as advantage of Leer teams Leer We South so which is close building great well. so of of many is

augment our ongoing from our South build out strengthen As it of coking coal example is far only most but existing obvious indicated, is efforts Leer the and to one. the portion

team to made enhance metallurgical metallurgical of segment on critical every that at forward. mine everything should operation performance we trimmed remained self-evident At efficiencies. cost Leer our that sharply it the progress initiatives new during technologies, improved focused has on mines in going continuous one the quarter is commitment systematic our Leer and and fact, implemented the In improvement its out rung our does way in linchpin performance

quarter so lingering of kind coal locked we're pandemic South. with Shifting is ton estimates output to stage and the million by structure Low from achieve the product during Beckley that figure average for sustainable the in significant ton the industry we're the good Leer's lower Leer our in to margin and per dividend. our about first unit should cost the believe Beckley $XX in expect increase that ton levels. and of coking longwall the prospects continue volumes of ratable shipment make set an which our the of post transition don't may unit mines per even Interest for solid the continues we while precisely US capabilities took room-and-pillar Leer's place startup high in on recall the we to Mountain X now During $XX of annual less around the coal declined Paul We incremental quarter quarter. cost to pay as Vol every to reason Laurel than despite per enthusiastic level internal annually. our companion our steps our in produces mining. that impacts steps progress mine quality the wide We've a than a should Based that's $XX to you taking At cost sites as the that exceed performance getting noted, mine to the productive ton we there levels.

that transition As of we the which own of effort is [ph]. from We that a operation our components you [indiscernible] use the the was fee continuous expect may activity continuous seam now two into two number five the key in three which seam miner fourth to seam the operating miner gas later to recall and one year. the have of of move in this in mining leased gas

of the where product the two overall In are associated a addition, we're step beginning up the and move in lower to with meaningful in reap metallurgical is the the marketplace sulfur to more quality characteristics seam, the benefits gas advantageous.

positive operating our positive fully throughout of early Turning was the that noteworthy our improved quickly aspects to first most due quarter that's impacts the our a in execution one of continue performance steadily related to January COVID performance quarter February After in period, the expect momentum trajectory principally to start encouraging QX. as we and upward progressed. our and systematically and slow

Leer XX% in when in longwall taking the South we're even in into additional result, account QX of approximately obviously quarter and quite a improvement As anticipating an up shipments time. ramp when the the the metallurgical increase second starts

progress our we to and much Even some we generally expect a quarter keeping thermal degree results important operations, high be level though, we those legacy and plants. US ship the shrinking power stockpile demand performance. is the West to with thermal to footprint. first the line at environment. on expect in our As Elk levels and market higher far still export positive Counterbalancing still operational Equally with in produce thermal QX improved with QX factors as at soft made

our the majority summary, with for significant than execution complete on by the as work expect operations. shrinking $XX demonstrating at our we the platforms asset metallurgical our strategy ongoing as work with capabilities to of with and execution work vast obligation to our our final pleased still the generating most million are PRB pleased complete our over well Creek cash turn simultaneously I'll thoughts progress occurring the able totally are on reducing that the of that of reclamation to in where of where Matt excellence mid-XXXX. free quarter we During we financial With operational thermal Coal In call for footprint were towards more we're while the Matt? the retirement well, we as platform those performance. capabilities strong expanding

Matt Giljum

strong I'll unit good our a quarter for with were and the $XX than volumes. beginning an despite cost ratable morning, performance benefitting comments environment John few metallurgical on and below everyone. Thanks cost with less Where with ton first cash pricing margins begin per impact the segments. quarter of COVID and the improved $XX.XX control from

quarter strongest first $X as seen noted transportation to while upon the expect remainder the the throughout together of year the the quarter reclamation up. were Taking just Leer impressive important accomplishments the per ton challenges we over roughly John since margins side, of On first that note ton quarter. despite thermal start the the segment of per improve and we've margins to XXXX the performance middle with South it's

and cash flows to liquidity. Turning

was First million working totaled a negatively impacted by quarter cash capital flow which million operating $X net $XX increase.

including first nearly quarter Great project. million ramp the was in associated we all $X segment. quarter. for export production improvement second million the thermal $XX advance substantially up of Leer in quarter the South quarter where metallurgical expected $XX the that Lakes was But cost $XX business. the just of the an capital than the as with of course well increase is of spending one related interest Capital The see as capitalized million was Maintenance shipments over quarter million build of project and for to of inventory given the this was in larger the normal year's typically

qualifying tranche just million of $XX a interest an bonds on proceeds nearly was gross more remains to-date quarter unrestricted we rate of totaling use of receive exempt first the quarter $XX expenditures than cash sheet successful $XXX X.XXX%. XXst. $XX closing of finished $XXX the quarter the for the activity We at tax of the financing million second primary our total on at million that balance Based with for in liquidity Our and restricted with million. March million of

our cash inventory lower arrears credit levels was determined month availability While with based receivable were is facilities our expectations, February a XXst line Availability and our with than in typical. in levels. availability on under March

has the As end improvement of quarter we've to sales availability of highest the than in over and March subsequent levels the quarter saw improvement as course under we've with an million. mentioned, reflected the we facility That seen in the quarter. production the $XX more been increase

do we reported while us Finally, exempt the tax The bond as become we Leer available not restricted liquidity. in our complete include South development. cash to proceeds remaining will

With of in quarter. be funds expected remaining the the released majority to second the

to a The of increased to of slightly only bonds. quarter remainder aspects like second and expense our the I'd exempt to tax additional change is the the few comment in is Lastly, due for guidance with XXXX. guidance on respect which interest our

of segment per spending the spend will in timing remaining guidance and cadence. to be expected ton the capital unchanged, our South cost of wanted by with Both quarter. quarterly is I the highest our annual and Leer cost the significant While address metallurgical influenced capital the second portion some remaining a

return back segment This is capital the step typical year. expected cash year those expect will following pattern. Operator, sets up year. we've half Once QX I higher both and Before down of the we're back sufficient flows a the that, resume a to also of generating to to address free the for on we ton be in seasonal Initially the call volume flow in substantially cash Thermal will than improved see back reclamation to earnings be With fronts, take made to shareholders. meaningful in in to cost rest progress turn the returns obligations. per ready continue to questions. reduce and the step liquidity, bolster used you. to over half we those the of

Operator

Riley first Securities. we'll from Lucas take Instructions] from [Operator our Pipes B. question

Matt Key

aiming general at the What Lucas. Thank is actually China sales in this for there for of for kind target This year? that Arch is during are any seaborne China And the time Matt Key in asking terms question a you. scheduled commitments here if percentage of is XXXX? currently of

John Drexler

go for question indicated Matt, this overall met guidance is as book. going that book John Good that we Drexler. look we at to is market. XX% into the our We've of our export provided our

the expect a of of, at Asian that look which our would the about to market. market that we be obviously view As amount we we've we into China go indicated going book part XX% into of that

China been we China been did XXXX, traditionally indicated over opportunity the business an market to. to the going or where see think we not opportunity as that's to which been fourth earlier into it's which out book we advantageous late been in the has we did of course quarters Now there. But that's

as are does of and is think though, the market. if get sit China seeing the China. now our China we we've advantage between indicated that and As to lining our opportunities view give us the we take and going here into term of Longer today additional We out. that we'll term that potentially that overall right to opportunities well see look will it be opportunities into and silver there are we take into think ultimately forward longer received issues that. we'll worked further product on In Australia meantime get advantage

Deck Slone

to that Matt, build on bit. this just and little is Deck

So of and regarding imports. Chinese opportunistic happening because why what's we this do as policy with absolutely Australia view

longer so to experience we and suggest good so book which believe is our We an be are so experience to far there certainly this some in long-term are encouraging talking so folks of that's do Our some term be and really our creating that far. been might we It's certainly relationships. going is aspect engagement a opportunistic. while who

both and as the indicated Leer million and really base bring very coal we're those that we midpoint tons stated South breadth we to of how a noted and as and being in sort We build for potentially in of half are for the about fruition on we those remains and don't we China believe book whole begin into and longer additional positively come customer depth at before to there to have or sales careful that whether place of want second do the tons about term. to and opportunities not the some we market we've are about interest tone quite very expand our as the be the conversations we to seen. us high. The year But the look fact good. we've would this remains continues of have I to again sell X only add, lot constructive feel simply feeling the we're So overall. it's And we to

So if despite the the feels had have frankly, rest resulting year. available the placing to pricing. for Chinese really disconnect demand the we Coast and eager East of remaining market are has to the significant. issues because don't policy issues significant US any The which toned put market price constructive, been in with Queensland been us coal, we'd the it Quite be the we volumes more into that we envision

So feeling about quite that. all good we're

John Drexler

out sold with Matt, forward. about currently move QX. as We're Deck side. for we're on and note tons our very feel even business is of forward said, we million away further we And met turning what prompt I as it's strong see markets moving We again to that important left to through move. the once X think opportunities the good interest indication

Paul Lang

in said, seems about year. seen. in vessel largest have we're base little important at going bit of curve any POV I We're forward the $XXX. us going increase steep think I just into color. this this think I the this. put barely look kind to as not. get CFR whether China use to point prices But not It's as they in use or get about going is market solved you think take going much will Deck new today. is pricing that's two. in or spot But is a think very this issue look last of arbitrage especially to resolved some to is clearly off Obviously back market. the an right in build you We're so advantage important so half the that of the out of It right $XXX to at time. The now. customer of It's It's that there.

Matt Key

just really helpful This quick really it. wrap And me just to macro Got here. gentlemen. up is it a detail. question things appreciate for I

production your here Given has What's I other in kind of XXXX? really kind kind here? strong ramp of people deal [ph] for producers of kind to held into lot a expectations in expect downstream improving? Is you US be of this pricing able kind well longer think the of keep current probably US it going metcoal better market Do that of up operated to of than and this thought kind to region period. with

Deck Slone

least XXXX. million We permanently much price. take some But so, we Matt, million it's know is in of Deck or to that that fell quite higher there's coal seen that two is out persistently a in that Listen, that frankly amount back. and tons either fair of I'll start. to over production can were XXXX believe going of XX rationalization tons of metallurgical out a around a of amount XX we've past come lot tons that years it, here, absolutely the at as and there's XXXX, we you think US production, the or at XX million

ships we in certainly mines US coking very metallurgical yet. while in XXX But there of simply as we So something not etc. XXs. of XXXX. can looks the comparable fewer QX supply year we're had QX to chance that yet go envision of was a you and running factors lower to it's operating. all in XXX data haven't of when XXXX see the actually It XXXX back are of only mines running reduction were QX like data back to coal at bouncing mid for going capacity again look there This at XXXX, all QX. in QX [indiscernible] The some

some of operations. cost of return mines a those seeing higher Those shutdown. not we're So that

think - degradation return we going that going as change and mines and higher it's do to a in expect to in some that the don't the to if higher meaningful in to we that foreseeable million saw more even points see XXXX, US there's We in ongoing we move forward. think in we we is So tons particularly going structural future player be so smaller depletion any Appalachia see cost of a Central pricing. significant really XX

degree. in seaborne the we and think we're if look in we American an should to on of US. more we that's really a going little their to some do. hearing have of position, coal have of market and in They We opportunity to of bit times So augment focused be not rather for those buyers market. where beginning conversations. position. we of see, XXX around bought ton But to okay, terms overall the most million there's of It's fall who or are the North are American But been are and see They million demand our the huge. it North to augment coking so bounce a there certainly piece us we've if so tons marketplace the tighten coking to having help our find XX market than going ton But always certainly XXXX. some coal can we the to not significant those

positively feeling about that. So

John Drexler

continuing into metallurgical the And a to that, we long-term the talked we've just around require world. frankly add market market view it about supply think overtime the lot and additional of I it. on a see of Matt, fundamentally quite builds to amounts coal to

forward we're so so is ourselves the in as a to in on about as forward can matter capitalized in good We frankly goes. don't marketplace market a a Leer are time been very South no the think put challenge the the think price excited quite position get cash that put generate be world, position a quite the completed. we'll in past. we've to opportunities rise we've that fortunate to that and in where there's see opportunity to amounts that the that's and It supply here market the prices the with We we responses the higher frankly here, a why around not feel capital had to and move that with. On position cycle longer of significant there many and of meaningful moving continues and available opportunity to the of supply there's of lack to there side,

Paul Lang

a were thing you about were Matt, Deck the range. stronger. to production, add volume in of The XXX US when Sitting here this XXX They in today, is, it quite sort a drop John the these the and when prices in I think enjoy great would bit only and XXX. I perspective. metallurgical put think XXXs we

you to some think or $XX production bring this at down $XX to what's of was production I'm shut be back. being not If sure going needed higher. that

Matt Key

forward. I I'll the wrap Appreciate up Got helpful it. help. all luck But there. good it. That's appreciate moving really color. it

Operator

and on Instructions] Martin will Benchmark [Operator move Nathan The from to we Company.

Nathan Martin

start of in on off mix expected. stronger kind the Maybe side. came little Pricing than

Australian Looks in You be those to incrementally higher the your you to like - tons priced about level. demand. to I obviously in quarter and last the since was price premium ask prices coals. additional supply, noted forward continue some export thoughts going

Australian that buyers coal has of China you're Australian think most that traditional from you are October. against [ph] been few ask, continued market answers. guys somewhat roughly in now there still out suppliers? since would tons shift to through competing imports hesitant Are in away more that have normal I I addressed finding has been last

Paul Lang

Obviously, whole seen traditional movement into right of depending going buyers revolves a it's overtime closely goes. between lot the traditional we've that the watch and of it to dispute something Chin But Australia as on and now, markets. long how we're of not

in they're I quickly. buy with the gotten traditional blends think they've buying term change if is comfortable markets and the concern, that very, they adjust that longer that go could and very there out from, very

a lot So yet. that of the some Chinese we as additional see into markets. and we continue with obviously dislocation watch something seen with the it's it's we've we closely discussed of opportunities But to counterbalanced that haven't

Deck Slone

the million build to quite We broadly less bit tons And weigh The a Nate on just development seaborne in significantly little more But did look year China if that on of about significant supply import than coal, restrictions imported will coking demand. market. the and is in that marketplace. imports little the XX frankly, they China last bit. a this a talk

is XXXX are side that to pre-pandemic level interesting impressive are expansion a and in that capacity and the market. market and pressure at to you see there. than by fact the The were then underinvestment. as around coking I or not sort is look factors strong those tons it's trends for to we and the when based so to helpful could clearly the story be of same approaching to you we're most Paul manufacturing things way. first We're furnaces we this globe, prices of and of blast macro to to term. continue you support that India which in that coal restarts the globe. XXXX, see. where you steel to look production still provide guiding mills They are The of see be Of demand we quite an significant discussion consumers are after globally to are level, pace, prices pandemic back be rebound back stratospheric quickly readily could of in that continues see the is the continue major one-year on levels steel like producers lower and near is get they're and and clear attractive encouraged steel supply back higher economic push the the course, an the to back to even think think it get outlook really to demand can happening months All very they well back sort certainly We back higher could more see would under levels. additional higher are US is the few The the said into around about, PMI and going counterbalancing take cokes important continues on about seeing and continue be potentially steel talked XX%, just and about the otherwise big stimulus levels certainly

Chinese are policy those have significant counterbalances highlighted. So The too.

tone constructive. continues that does concern. to feel while indicated The the a market in we've certainly As is

very shelling our out good in see to XXXX. through is interest continue We available tons. The forward curve

as watch situation So in really the China. about even to fairly market we feeling carefully the we're positively continue

Nathan Martin

Great color Thanks. guys.

price, thoughts Just out somewhere you it on sold there? you like, to left quickly, sounds maybe the mentioned this with million the expect for have roughly X with you in half press met tons those back any first half, real

John Drexler

year. into of tons the to be indications able we us move We'll to turning and half we're move market year market in seeing prices. in will opportunity is those right back those into. the that from All the business back We're rule great everything that we strong the half environment to move at attractive give near a volume that away term just and of the think expect

Paul Lang

[ph]. the I on think go of out export end ships the shift as our going long at index the Nate. our as time to at of It's day, are

Nathan Martin

ships Got then it. bit. and on Thanks little Paul a in

You out, tons reported Any shipment additional can sorry? service, well guys issues we noticed those as what extract the when you met pointed it additional to production lagged numbers. during other and thoughts timing, there logistical vessel rail quarter was move, coal

Deck Slone

of So Nate strong quarter had tons that's million you question. and a production X.X sales. We good saw

us. its seasonal for Some of

Great via Lakes. our coal of the Some moves

Leer it. first up the have so at portion here. lake until open longwall a coming a So the do season of We quarter, doesn't after that's move

of that the preparation so some advance coal there's and available having for shipments. And in

and in mid third expect further As even year South we we've shipped XX% of volumes quarter. we our in indicated, back then as up second the step Leer half online and to the quarter the bring

our expected. with is our up book we and aligning is everything So had plan as

John Drexler

that the hope at etc. there look proves are quarter. you the at second right there shipping that timing, And you XX% conservative Nate, when when we at vessels schedule the look end of certainly

you're So trajectory we'll built The meaningful is positive see right. production. how quite in that We've out. of But plays inventory. terms

timing. But of that all good So we some feel that. about could just be

conservative. number XX% target. think to and share But to that's the hopefully a we now right again is So reasonable

Nathan Martin

Thanks. And XX% a of perspective? you XQ on even thoughts guys give some mid idea then Leer the from it. ramp the cadence and went XX South Any and as your through. does just obviously Got maybe to segment up XQ

Deck Slone

we that a there'll we've online We're and and third bringing we've that having running and we've so with the not so excited the South of But about the quarter fourth on basis. be that startup brand guidance in acknowledged see X real running. cadence production South step million of up specific we're mid the we new Incrementally a fourth quarter full and annual third then quarter. longwall indicated bring into up of Leer longwall the given with of longwall going quarter expect an ramp But tons Leer or a to online. on time bringing probably as that quarter

from I a some think into estimates of would that level mean perspective. you can what high volume back

Nathan Martin

your might legacy then to future. sound - Black obviously finally, it get times assets maybe you gentlemen overlooked Elk the like Thanks plans seems Coal on progressing your for on update and specific thoughts as at Thunder in Creek there your just thermal Also more like tends get planned. discussing for plans your West in

Thanks. as So can update line us you on that give well? an

Paul Lang

think our Creek following start put the we control not that off first John basically But like picture quarter we're they'll talk last just for about it's on. we'll made bonding going this the and look look some particularly John team down it cross. plan. strategy the shrink we'll at second, rapidly is, the great forth maybe the possible to for buyers we this and maybe the what's we're starts bring to the about of I is, as talk of about down fall. on we things to executed will as and his but first and ARO Nate, Paul. the keep you what and think process specifically expand we're the macro progress two-pronged we approach and believe let We're continue this I where feel about is dropped I'll pretty a liability first path we to That point, bonding Coal and working on amount footprint. very going, going and bringing with also And good run at I and continue this these universe carry in true I look that parallel cash buyer assets. path only

John Drexler

the as environment. have challenged to over the it's with last Thunder and I'm have process even majority we that as the our add as in expect environment unique team X cash that really structure of asset We've continue progress history production reduced forward. talked market opportunity and real significant at well. a we'll footprint great the portion decade the real outstanding on half be focus earnest forward as We're and the and job year that us to feel vast proud the to The next reducing real we continue what moving in I'll before, hit on to think going footprint. about year complete Tier a remainder operation and that's head into to control The and there when responsible well. Paul Creek be done it and assets Coal first volumes path the of its great so of we makes to responsive our in I of a the Black Taking early down teams really it so demand and I that reclamation basin. opportunity we the to cash generate to to about cost market and to ability in the of the in required as continued this think there on out Generating cash. off that move a they We of be move there good continue reducing start.

Deck Slone

assets ability to current a We to flow The Deck. really optimize that Coal generating that cash it contributor own levels can focus while the Black thermal next cash hasn't intensely advantage meaningful operate of confident significant continue Thunder its in closure their meaningful which amounts we drive feel at and real isn't about helps certainly do a is been contributor the at cost to and here want that. which quarters. ultimate Creek EBITDA very five with to Thunder at because be will to Nate, we way Black their again important pay we

have final nice it's Black to a generation optimize at at to position But be and focus on again be Thunder. So Creek. to still cash reclamation able to Coal

Nathan Martin

take again your care. guys and Thanks for Perfect. time

Operator

a Lucas from B. follow-up have Pipes Riley we Securities. And from question

Lucas Pipes

picture South over Leer is whenever but Leer kind there anything better quiet Could with so thoughts recall are completion. make thoughts and a evolve year? was updated M&A could the bigger wondered past question I answer whenever any - years lines. a just you. South. What picture then you on I South value more pretty of and the M&A again maybe this months broadly upon sense what the in on the here is your coal space? Leer so but that maybe and correctly if you've feeling South along more few It's bigger question benchmark to metcoal the broadly if much was M&A. and more Leer against over wonder, a on six Thank

Paul Lang

is John and add, I'll start Deck Paul. this and have So off be if anything to it'll great.

because actually overall only say Basin. that of down to decreases down, to even difficult like that I every and think idea out in overseas But plays could their this situation principal River should a company each kind ultimately we agree has it's though head exactly these ultimately this that this good that is fact considerably consolidation that I beyond get opens cost done. I The in end can and South deals to Basin we At get this Powder think continue It's River world hard continue address that running as of and things get demonstrate reduced. in one liability up path. not to how have and the up of them the the have we US. bonding as our we situation day, Leer get with Power the envision of everybody

it the move makes focus overall we then do our care sense. Coal Creek Basin. can I now in the going is Power Thunder. headed River and control to we're what aligned, take is controlling down can we've We're we to thing stars path But of best Black right think if So the going onto

John Drexler

Drexler. is John This

indicated and it's served I it on on I went carefully of that to very overtime well it's we're cost any think One things fundamental focused back to what that you've and think thread that's is we'll we've opportunity. that X Tier base low also Arch us and seen committed asset the from Paul's discussion

opportunity the cost I any there through It's and quality to have of the and have reserves that's the left evaluate to we component a as move produce evaluation. out but there that high what's doesn't of significant to of typically forward we'll the so the any opportunity aren't mean bar opportunities think that that a We lens evaluate.

Deck Slone

It's jumping you on. Number Deck, a of on. know going other lot for have of thanks calls We competition.

simply I for of South. again in being add, pause of we the and took we on Leer a cash of a said appreciate really we're reasons point a driven cash to bigger a that in etc. South you generating and quite operating at going past. had we're building ultimately took done as of also, market lot Look the and the capital terms but simply program returning would again, range we looking have the So comfortable Leer cash We with generating assets pause machine call. return a strong we've and have we've

Leer that and South. was a and very We It's have really enough about we years the it. with additional house. smart South. same now in our So accommodate screening primary years the reserves look forward we still sure then can in tire that times, we everything said out project organic a as We're decided as Leer for indicated focus. there Leer and against to we've Leer every before continues there to South will at many we the But always know, we before as we rough. with going there's base, said investment. the opportunities significant have for growth We many Again be holds three the diamond what's and reserved made decision, you be already kick maybe the moved

no We what a pretty that's will that's hurry bar. with absolutely are any But in we forward and that. high any screening of be opportunities against move to

to be the opportunity run are on we marketplace cash. continue meanwhile returning very any So have to and comfortable assess we're the we assets and careful going as quite

Paul Lang

the do. cash our the at for to of four shareholders. generate just fallback which these We're the is to next end mean return are I XX up going effectively and day Lucas, set years mines to

Lucas Pipes

and color the Very of all Yes, again. thanks luck. best appreciate helpful. I

Operator

International. Paul from Our question from Gate [indiscernible]

Unidentified Analyst

previous was You the and my to same the you sort of do increases exposure god risk I'm it sense of course it in get acquisition premium back question compare conversation base of the sort and and share far of last own the how do to else so how and troubles the that it you jurisdictional you the per question suppose actually recent and we've in exactly already your around was Mozambique in execution compare probably just reserve have forbid seen see and at buying because stock was something exposure with thinking I zero you for US as here have question answered zero anything your I - of is to M&A because question that in under a an around. the that that same do about that sort the example. all guys say let's struggle you my

the reserves quality the that of position life with pretty of a sort just cost versus there our increasing risk the political have what to already [ph]. So combined you've on and It's the high exposure we got. bar in

Paul Lang

of we for have think At you're trade product day, our that's increased end and down the and if quality cost doing with our or we that's end we're up the what right. I of fine. we Paul, where the comfortable next decade, are

Unidentified Analyst

sentence last that much question. But thank of previous answered you you very - probably the that's indeed. Yes,

Operator

questions And Paul for to any the there queue. over are in the conference back concluding no to further would turn Lang remarks. like I

Paul Lang

interest Arch to in participate quarterly would the taking thank at our I like call. and your everyone for time to today

in continue John earlier project. team startup project managing our major stronger. has project delivering is are huge Leer Sitting job day. not a we it's and XXXX, for cusp anything If the the for As time great to and it of on his the on final expectations I mining my budget. enthusiasm on the to just is, and diminished. we a here for noted a gotten guess do thought effort and a months develop hopes plan we had South great busy few announced the when the February longwall

in to look With this about to the reporting continue group that great in itself is come. it healthy and the forward we'll I'm Stay excited for a I to Arch will July. conclude call and transform more While years safe operator, everyone. accomplishment how

Operator

participation We again does conference. ladies appreciate today. gentlemen, your once and And that conclude today's

Arch Resources (ARCH) 22 Apr 212021 Q1 Earnings call transcript