NEW YORK Canadas
CanAm Coal Corp. has no plans to acquire further metallurgical
coal assets in the next year, president and chief executive
officer Jos De Smedt said.
The Calgary, Alberta-based
company currently has metallurgical and thermal coal assets in
Alabama and Colorado.
"We have no plans over the next
six to 12 months to target acquisitions. (But) if the right
opportunity comes along, well take a look at it," De
Smedt told AMM sister publication Steel
"There are at least three or
four small companies out there that are trying to sell. They
typically have 3 (million) to 10 million tons of coal reserves.
The big players are not selling; they have 100-million-plus
tons of coal reserves that theyre holding on to," he
"Obtaining financing for smaller
junior mining companies is nearly impossible, which is forcing
the small players to sell," De Smedt added. "Some of the
companies have no cash flow or revenue and theyre
desperate to divest assets or to create a joint venture."
In May 2011, CanAm acquired RAC
Mining LLC, a predominantly metallurgical coal producer. Its
Powhatan Mine in Jefferson County, Ala., produces 12,000 tons
per month of metallurgical coal, which makes up 70 percent of
its output. The remaining 30 percent is thermal coal.
It has no immediate plans to
increase production at the mine, which has a production
capacity of 140,000 to 200,000 tons per year of high-quality
metallurgical and thermal coal.
A minimum of 3,000 tons per
month of metallurgical coal has been pre-sold through one-year
sales contracts at $135 per ton, according to CanAms
website. The balance of its metallurgical coal production is
sold into the local spot market at prices of $145 per ton and
"We have five key customers and
weve already committed 750,000 tons of production," De
"Most of it is thermal coal," he said. "We hedge our prices
using long-term contracts that last until 2014. Its a
risk: if prices go down, then we benefit, but if prices go up,
we lose out."
A version of this article was
first published by AMM sister publication Steel First.