NEW YORK Alpha
Natural Resources Inc. aims to expand its presence in Asia and
South America, according to chairman and chief executive
officer Kevin Crutchfield.
"Part of the
companys strategy since early last year has been setting
its sights on more promising growth markets abroad, while
adjusting its large portfolio of mines accordingly,"
Crutchfield told AMM sister publication Steel
The Bristol, Va.-based
coal producer continues to reduce production at its higher-cost
metallurgical coal mines to balance supply with weak demand
from U.S. and international steelmakers.
Alpha idled its Boone
County mine in West Virginia earlier this month due to
challenging market conditions for coal. The company also is
shutting down the Justice No. 1 mine, which produces a 50-50
mix of metallurgical coal and thermal coal, and is slowing
production at the Liberty preparation plant.
The company confirmed
that it is sharpening its focus on metallurgical coal as its
core business due to a collapse in demand for thermal coal.
action to reduce our higher-cost met coal production where we
can, without affecting commitments to customers," Crutchfield
said. "We have a continuing process to systematically review
all our assets against the current market, and well
certainly continue to be proactive to ensure that were
not in a situation of continuing to supply a declining market
that does not provide an adequate return on invested capital in
the near term."
The company sells its
coal production to a number of integrated steel mills in the
United States and into international markets, serving customers
in about 30 countries on five continents.
dont know that Alpha is the worlds third-largest
met coal producer," Crutchfield said.
"Our total met coal
sales last year were a record 20 million tons, with more than
15 million tons of that going to international customers via
several U.S. East Coast terminals, the Gulf (of Mexico) and the
Great Lakes," he said. "In just the past five years, U.S. coal
suppliers have quadrupled met coal exports to Asia to customers
in South Korea, Japan and China, and Alpha has had success
there as well. Also, Alpha has been well-placed in the growth
regions of Turkey and India."
contracts for the domestic market are typically priced using
long-term or annual contracts and it hasnt been subject
to the recent well-publicized pricing volatility that has
affected the sector.
The company has been
watching steel capacity utilization trends in North America,
South America and Europe very closely for any early signs of
"We do closely watch
the utilization trends and the flow-on implications utilization
has for the coke batteries, and therefore the raw material
input needs of our customers," Crutchfield said.
"We have seen a recent
shift to lower rank, lower-cost coals as capacity utilization
has decreased, reflecting the fact that coke batteries are no
longer a production bottleneck and integrated steelmakers can
afford to lengthen coking cycles by several orders
of magnitude," he added.
A version of this
article was first published by AMM sister publication Metal