PITTSBURGH SunCoke Energy Inc. is pushing to further reduce coking coal costs even as earnings jumped 42 percent in the first quarter.
"With our coal business facing higher production costs and a weaker pricing environment, were taking action to mitigate the impact of these challenges by scaling back production at higher-cost mines, idling certain mines, redeploying resources and lowering capital spending to reduce costs and conserve cash," SunCoke chairman and chief executive officer Frederick "Fritz" Henderson said.
The company did not elaborate on which mines will be idled or have their production schedules reduced.
The Lisle, Ill.-based metallurgical coal and coke producer posted net income of $16.9 million for the three months ended March 31 on sales that rose 44.4 percent of $481.3 million. The sales increase was a result of higher coal selling prices and increased output, which in turn was due to the October 2011 startup of the companys Middletown, Ohio, coke production facility.
The Middletown plant, which serves West Chester, Ohio-based AK Steel Corp., contributed $68.5 million in revenue for the "other domestic coke" segment during the quarter. Revenue for this segment totaled $378.1 million, up $130.6 million from the same year-ago period. The Indiana Harbor coke production facility, in which SunCoke holds an 85-percent stake, also showed operational improvements during the quarter, contributing to improved revenue.