JOHANNESBURG (miningweekly.com) – Even though the global supply chain for metallurgical coal remains challenged and prone to disruption, strong steel pricing and production levels have helped to sustain a high level of demand for raw materials, which includes metallurgical coal, according to Corsa Coal CEO George Dethlefsen.

In a statement released Thursday, the US-focused coal producer revealed that the company’s volume growth for metallurgical coal sales had increased by at least 20% for the sixth consecutive quarter in the third quarter ended September 30, growing 44% quarter on-quarter.

Metallurgical coal sales volumes increased 44% quarter-on-quarter in the period, and 225% year-on-year.
"Driven by volume gains and operational efficiency, Corsa achieved increased profitability in the third quarter of 2017 as compared to the second quarter of 2017,” said Dethlefsen.

He noted that the company’s sales and operations teams continued to perform well, with volume growth across all three classifications of metallurgical coal sales – including company-produced tons, value-added services tons, and sales and trading tonnes. 

“We remain on track to double production volumes of low volatile metallurgical coal over the next two years,” said Dethlefsen.

The company’s metallurgical coal sales in the third quarter amounted to 575 080 t, an increase of 45% from second-quarter levels. 

Year-to-date metallurgical coal sales volumes through September were up 199% from the first nine months of 2016.

Corsa achieved an average realised price per tonne of metallurgical coal sold at its Northern Appalachia (NAPP) division of $112.15 in the third quarter, an increase of 61% compared with the third quarter of 2016.

“Within Corsa’s NAPP division, over the past number of months we have developed, staffed and equipped the Acosta Deep mine, started placing equipment orders for the Horning mine and have positioned the Quecreek mine for retreat mining,” said Dethlefsen.

He noted that this development work was expected to translate into increased production levels in the months ahead from the Acosta Deep and Quecreek mines. 

“We project the Acosta Deep mine to hit its run-rate production level of 30 000 to 35 000 saleable tonnes per month within the next three months. We started production of metallurgical coal from two surface mines in Pennsylvania during the quarter.” 

Corsa expects these moves to increase company-produced metallurgical tons at the NAPP division by more than 50% in 2018 compared with projected 2017 levels. 

Continued metallurgical production growth into 2019 could grow production to levels double that of 2017.

Meanwhile, Dethlefsen said he expects Chinese policy to continue to reduce metallurgical coal production capacity and drive consolidation in the industry, which should support metallurgical coal prices. 

“We expect to see continued volatility in metallurgical coal prices over the coming quarters.  We continue to remain focused on growth opportunities from our sales and trading platform, acquisitions and organic projects."

With adjusted earnings before interest, taxes, depreciation and amortisation for the quarter ended September 30 amounting to $13.2-million, US-focused coal producer Corsa Coal’s total revenue during the period was $80.4-million, an improvement of 235% compared with the third quarter 2016.