Walter Energy 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Encountered some adverse mining conditions

“Although we encountered some adverse mining conditions in the quarter, I am pleased with our overall performance and four and seven are running as expected.”

Produced 2.4m tons, sold 2.7m

“Second quarter met coal production totaled 2.4 million tons. Production was down compared to last year in large part due to idling Wolverine in April. Combined met coal production at mines four and seven was 1.8 million tons compared with 1.9 million tons last year and in the first quarter of this year…Met coal sales totaled 2.7 million tons in the quarter, up 11% versus last year. ”

646m in liquidity

“On a pro forma basis, the Company’s liquidity at June 30th was 646 million comprised of 612 million of cash and 34 million of unused capacity under the revolving credit facility. We believe we’ve taken the necessary steps to manage our liquidity and position ourselves to reduce financial risk prospectively.’

First debt maturity now 2018 vs 2015 formerly

“I think the date that matters with respect to runway if that’s what you are pointing to, is the first material debt maturity now versus even three to four months ago it used to be in 2015, now it’s April 2018 and again we will take the necessary actions to put ourselves in a position to refinance the debt at that time. So, we are focused on all the controllables”

No liquidity concerns in our company at this point

“As I mentioned on the last call, the timing of any asset sales is dependent on the recovery in met markets and there is no liquidity concerns in our company at this point. We think we have adequate liquidity and we’re not going fire sale assets.”

We do believe our equity is undervalued right now

“I think as we mentioned on the last call, if you remember that we do believe our equity is undervalued right now but at the same point we are not ruling anything out but it’s not really part of it, that debt equity swaps have never been — it’s not a program by any means”

Hard to say when capacity cuts will start to work through into pricing because people are still clearing inventories

“As I said, there has been about 20 million tons announced in terms of what’s been implemented, I think a large amount of that may have been implemented, but they are now they are working just as we are, the inventories both at the mine and then those inventories have to work the way clear through the customer. And that’s going to take some time to estimate how quickly that will happen is very-very difficult. I have seen estimates as early as we’ll start to really see the impact of that in the fourth quarter. I’ve seen folks say that they believe that will be early next year, but it’s really very hard to tell.”

I think these cuts are enough to balance the market

” given the projects that are coming online and the announced cuts, I think we might be pretty close to balance once it all works its way through.”

Arch Coal 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Believe we are close to the bottom for met coal

“Of course, we believe that we are close to the bottom in the met markets today. Global production curtailments have accelerated in 2014, and by our account total nearly 20 million tons thus far.”

Thermal coal consumption up despite mild summer

“Turning now to domestic thermal markets, we expect coal consumption to be up by 20 millions tons or so over last year, and that’s with the cooler summer weather that’s been playing out today.”

Coal still in the money vs. natural gas and stockpiles are low

“Western coal remains in the money compared with current natural gas prices and coal stockpiles at generators are on the low end in some cases, well below targeted levels”

Seeing interest in thermal for 15 16 17

“as Paul indicated we went out and we continue to see a lot of interest 15, 16, 17 in the marketplace that we think are going to be a pretty decent pricing.”

confident that we can carry cost controls into 2015

“it is really a credit to Paul and his team, how hard they’ve worked on cost control and management of our capital and you are really starting to see this. I’m confident that we can carry that not only in the back half of the year, but as we move into 2015”

Spot pricing for met coal coming at 112-114 range

“I would tell you, with third-quarter benchmark at 120, we are seeing spot kind of we’re around that 112 to 114 range. We are certainly disappointed in the pricing, but we don’t think that this pricing sustainable. When you look at the percentage of suppliers in the seaborne market that are not generating any positive cash that percentage is pretty significant.”

Still 25 m tons of oversupply in the market today

“Currently, we see about, call it, 25 plus or minus, million tons of oversupply in the market today. We think that as we move into 2015 and you get a full year of these curtailments, that that will have an impact”

When met markets correct, they over correct

“We don’t see a whole lot improvement for the balance of this year, but as we move into 2015 there’s one thing that we know about met market is they correct, and they often over correct.’

We feel very comfortable with our position

“suffice it to say we feel very comfortable with our position and with future opportunities and continue to be able to manage our liquidity aggressively as we move forward if the challenging markets persist.”

Walter Energy 1Q14 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

We’re controlling the controllables

‘The bottom line is this: Yes, the market continues to be plagued by low met coal prices, but consistent with our message over the past several quarters, Walter Energy continues to execute extremely well in the areas we control.”

Cost performance was “outstanding”

“Cost performance was also outstanding, with production cost per ton 23% lower than last year’s first quarter.”

No debt maturities until 2018 and minimal covenants

“The financing has removed all significant debt maturities until April 2018 and extended our revolver until October 2017. As well, we entered into an amendment to our credit agreement that eliminates financial covenants, with the exception of one springing covenant for those revolving credit lenders that extended their commitments. ”

“Yes, the springing covenant comes after we have, in effect, $95 million drawn on the line, excluding LCs.”

Seen some production cuts, but need more

“On the global met coal production side, we’re starting to see production cuts, with over 10 million tons in announced cuts recently. The majority of the recent cuts have been in the U.S. and Canada. We believe there is still excess supply in the market. However, we also believe that we’ll start to see cuts from some of the higher-cost Australian producers, along with more cuts in the U.S. and Canad”

Liquidity position is better than at any other point this cycle

“we’re better positioned financially than we’ve been at any point in the current cycle, with no significant debt maturities until 2018 and with liquidity close to $700 million. ”

Going to generate about 125m in cash from inventory destocking

“ooking at today’s pricing, we could expect, over the next 12 months — and really, we’re focused trying to get it done by year end, somewhere between $125 million, maybe a little higher than $125 million, from inventory. So that will be the biggest single component.”

Take a few months to get back to full production once mines shut down

“So the restart of those operations will be, as we’ve talked in the past, the — one of the concerns in Northeast B.C. is the availability of labor. And the longer these operations are idle, the — probably, the longer period it will take to ramp them back up to full speed. I would expect that we could ramp them up over a 30-day period and start to get reasonable production levels, but probably, it’s going to probably take at least 2 to 3 months to get back to full production levels during ramp-up. And during ramp-up, you’re going to have almost full cost and less tons during that period.”

Not planning on fire selling assets. “there is no liquidity concern in this company”

“Yes — no, I think on the $250 million asset sales, as I mentioned on the last call, the timing is dependent on the recovery in met markets. And there is no liquidity concern in this company, and we’re not going to fire-sale assets. So we remain committed to the target, but at this point, we have nothing further to add. It will be dependent on the met coal markets.”

Dropping capex spending even lower

“The CapEx for the year, we started off with a target of $150 million. We’re dropping that to about $130 million. And of the $130 million, the majority of that, probably $120 million or even a little more than that, is maintenance capital. And the $10 million in growth capital is really around permitting and just doing a little work, looking at reserves and exploration-type work. So the absolute majority of it is maintenance capital.”

Costs were good this quarter but they are variable

“as underground coal mines, you’re going to have — sometimes, you have an outstanding quarter. Sometimes, you have some hiccups that drive your cost up a little bit. I think what — at this point, we’re just willing to reiterate that we expect Mine 7’s costs to be similar to where it was last year by year end. They didn’t have any longwall moves in the first quarter. They’ll have 2 longwall moves later in the year, and those quarters, typically, drive cost up a little bit. And you also have vacation periods, things like that, to drive cost up a bit. So all in all, while they did have an outstanding quarter — and frankly, fourth had a little bit of a rough quarter, all in all, we think, for the year, they’re going to get to those numbers that we had disclosed previously.”

Dont think they need to access capital markets, liquidity from working capital significant

“No, we don’t see the need for that. I think our liquidity at $676 million plus the benefit we’re going to get from working capital is pretty material. We never say never about anything, but at this point, we don’t see any need.”

Not going to sell the core assets

“the real strategic assets we have in the company are the Canadian operations and the 2 big Alabama operations. Those are the real core operations, and while we — and we’ve talked about potential partnering in Canada. So anything that’s really not in the core, by nature, is available and is considered non — or is non-core. Now we do have a couple of others that are non-core but strategic things, such as — the coke plant and the gas companies are both we view as strategic but non-core. So that means we have got the assets in the U.K. We have assets in West Virginia. We have some surface assets in Alabama. So really — it’s really only — the only limitation is the core asset.”

The debt to equity swap is not a big program

“We have no plans at this point to do anymore. We have no plans not to look at things, but we don’t want to understate that we do value the equity, but we also look at our interest expense and we wanted to offset the March refinancing, which did raise our interest expense. And as we mentioned on the call, it’s now — it’s come down to — that went up, and now it’s come down slightly to the $255 million per year. So we’re not ruling anything out, but we’re not in the middle of a huge program, by any means.”

We understand that our shares are undervalued

” we do understand that our shares are undervalued. I know that there’s some dialogue about what dilution — we read some things. I think people need to run their numbers, and from our point of view, we wanted to — the first step of it was to offset the financing in March, reduce our interest expense and — as well as reduce our SG&A to manage fixed cost.”

It takes time to move the PCI inventory

“we’ve been moving the PCI product as fast as we could across the transportation system we have up there, and we’ll just continue to do that. So it’s not going to be, in any way, accelerated because there’s any urgency. It’s just — that’s what is going to take us to get that go-to-market, and we’ll move it to those customers. And I think you’ll see, over the course of the year or through the next 3 or 4 quarters, PCI sales will, probably, maybe, not be flat but won’t be down much.”

Alabama coal tends to go to South America and Europe, not Asia

“So on a yearly basis, we have typically shipped a cargo or 2 out of Alabama in Asia. That’s about it. And frankly, given where pricing has been and where freight rates have been, there just hasn’t been a whole lot of coal moving from Alabama in that direction. Our coal tends to sell out with South America and Europe out of Alabama.”

Arch Coal 1Q14 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Met coal prices unsustainable, but will remain weak throughout 2014

“current price levels are unsustainable for much of the 325 million tons of seaborne met production in operation today. Yet despite some of the supply corrections that have taken place, we expect metallurgical markets to remain soft throughout 2014. In order to successfully navigate these markets, we’ve elected to proactively scale back at metallurgical coal volumes to go further this year.”

Thermal coal is rebounding though

“One market where recovery is evident is the domestic thermal market. U.S. electric generation hit record levels in January and February, benefiting from a cold winter. In fact we may see power demand increase in 2014 after three years of decline.”

Met production shut down, but can come back to market relatively quickly

“I think on the flip side when the market does come back, we will have the opportunity to ramp these mines back up rather quickly”

Still 15-20-25 MT oversupplied in Met coal, wouldn’t take too much to get market back to balance

“I mean I have said 15 million to 20 million in the past; I mean I would say today, it’s probably in that 15 to 20, 25 range plus or minus. We are encouraged over the last week or so about some of the rationalization that we are hearing about, not in Australia, U.S. and Canada, let’s call it 5 million to 10 million tons. We think that’s encouraging. We think the 3% growth in steel demand is encouraging and we think thing is going to balance itself out. And we think we are not forecasting any material improvement in the met market this year but what could potentially accelerate that is if you start seeing more and more people pulling production off. And we think at the second quarter benchmark of 120, the fact that the Australian dollars move back up to $0.93, $0.94, those guys are probably looking at where they might trend some of the production. So, on a 325 million ton market, it wouldn’t take a whole lot to balance this thing pretty quick.”

I think Met has bottomed out

“I think we have bottomed out. And I think given where people’s cost structure are and the fact that you’ve got a large percentage of suppliers in the world market that have a cost structure that don’t work, something’s got to change.

And I think you are starting to see the early part of that with some of these cut backs. I don’t know that we have a magic number out there, but clearly as Paul indicated, we’ve set our self up in a manner that allows us to respond pretty quickly.”

We’re not bringing back volume unless it’s sustainable

“we are not going to bring volume back on for a quarter or two improvement, we want to see something that is more multi-year.”

Joy Global 4Q13 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Beginning to see some signs of improvement, but commodity price under pressure

“Though macroeconomic indicators are moving in the right direction, commodity prices are still under pressure. We are beginning to see the signs of stabilization. But overall, soft market conditions continue to make customers cautious about spending on new projects.”

Transitioning from just an aftermarket business to a service business

“You probably noticed Jim use the word service instead of aftermarket in his comments on the first quarter financial results. This is purposeful. Service excellence and growth is a core strategy for our business and the name aftermarket doesn’t describe what we do and where we’re going. Given the importance of our service business, we are continuing to invest in service centers globally that will support our installed fleet and provide world-class technical expertise to our customers.”

Seeing coal stabilize for the first time in 2 years

“For the first time in 2 years, we are seeing some incremental positive signs coming from the U.S. coal market. While production fell below 1 billion tonnes in 2013 for the first time in 20 years, U.S. coal production is expected to rebound by 35 million to 45 million tonnes this year. The continued normalization of utility inventories as well as the recent weather-driven spike that pushed natural gas prices above $5 should drive an increase in coal consumption in the U.S.”

Still excess steel capacity

“global steel production is expected to increase over 3% this year, reaching 1.63 billion tonnes, as global demand remains healthy. Excess production capacity of approximately 200 million tonnes exists globally. Strengthening economic activity will support demand, although prices will remain weak.”

Metallurgical coal still out of balance

“Weak steel prices will continue to put pressure on steel making inputs, particularly metallurgical coal. Seaborne met coal demand is expected to grow nearly 5% in 2014. Oversupply conditions persist and supply cuts have not been enough to balance markets. We’ve continued to see spot prices decline below $135 per tonne, and this resulted in the Q1 2014 contract settling at $143 per tonne, the lowest level seen since 2009.”

Chinese restocking cycle has peaked for iron ore

“After ending the year around $135 per tonne, iron ore prices have trended lower in recent weeks, a sign that the Chinese restocking cycle has reached completion”

Some customers stretched out re-builds a little too long

“Part of the effect that we had in our bump in the first quarter, some of the customers got in trouble by stretching the rebuilds too long and we actually had some very strong quick book and turn, anecdotally. ”

More supply coming to market for Met coal. High cost producers under a lot of pressure

“we still believe that there’s pricing pressure on met coal. So that’s got to work itself out. And there’s still the high-cost producers are under a lot of pressure. We also know, because we’re connected to this fleet, we put some significant longwalls into the U.S. and to Australasia — Australia that are driving a different step function in that cost curve and making that met coal more productive. So that’s going to put supply into the pipeline, again, putting more pressure on the high-cost. So again, that matches what you see in the commodity pricing, if that helps with some color.”

Joy Global 3Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

“I’ll turn the call over to Ted Doheny, who is succeeding me as President and CEO. Ted?”

“We think the U.S. aftermarket is now through most of its correction period. Certainly, a lot of machines came out of the field, as high cost production in Central App was taken offline in lieu of lower cost production from the Illinois and Powder River Basins.”

“we’ve seen production down in China year-over-year close to 2%, as lower cost seaborne imports have created challenges for domestic producers.”

“During 2013, we saw the U.S. coal market remain under pressure, but we are now seeing some improvements.”

“Met coal has gone to a similar story, with years of supply investment hitting the marketplace in 2013, and prices reaching 3-year lows in the third quarter of this year. Again, we’ve seen some firming in prices of late, as China’s import demand has increased nearly 50% from a year ago”

“this has caused met coal prices to trend at $150 per tonne level. However, these increases have been marginal and they’re still a significant amount of the global cost curve out of the money.”

“Global copper markets continue to see the strongest commodity fundamentals. In 2013, global consumption is expected to increase 3.6%. Pricing level should remain above the marginal cost of production and should attract continued investment in additional production capacity.”

“we’re probably getting to the end of the miners’ ability to stretch these maintenance intervals. We’re beginning to see our process list stabilize. We’re seeing selective projects moving forward that can achieve acceptable returns in the current pricing environment.”

“This past year was certainly challenging. We believe we will see the headwinds that are facing our end markets and customers remain an issue in 2014.”

“for 2014, we expect to achieve our targeted 34% decremental margin and deliver earnings per fully diluted share in the range of $3 to $3.50 before restructuring cost and other unusual items.”

“Thermal coal is what we talked about is bouncing around the bottom. We see some opportunities probably more in thermal coal in the second half of the year. And then, met coal, as I highlighted, we still see some production has to go offline. We know where we put in a lot of our longwall systems around the world. And so we know we have some high productivity, low-cost production coming online in 2014.”

Arch Coal 3Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“PRB coal is competitively positioned versus natural gas. PRB coal plants have been running all year with gas prices averaging in the 365 range. Days of supply at PRB serve plants declined to 60 days at the end of September and are likely to fall below this, this winter. On the national level, customer coal stockpiles could end the year around 150 million tons. That’s more than 30 million ton drawdown during the course of 2013. US coal demand is exceeding production and supply curtailments, particularly in Central App are accelerating. Looking ahead, even if we play at a scenario where coal demand is flat in 2014, we are on pace for another 30 million ton drawdown of stockpiles next year all else equal. With such a drop inventories will fall to levels not seen since 2005. That’s why we believe coal markets could become much more dynamic next year as compared to what we have seen during the last 18 months.”

“Brandon we are certainly seeing some positive signs in the PRB, inventories are coming down, we like where natural gas prices are right now, with normalized weather the balance of the year we think we really could be setting ourself up for a much better 2014 where PRB is concerned.”

“I think we would need to see a little bit more improvement on the met side, certainly inventories get down a little bit more in the PRB, activity pick-up in the PRB, see some price appreciation out there – those two things would help us.”

“My sense, across the industry and not just in the peer that, you know, equipment replacements have slowed and clearly there has been maintenance deferrals. And those are going to ultimately eat into any reaction we’re going to see. What’s more, as I’ve said in the past, this isn’t the basin I left 7, 8, 10 years ago. It’s not quite as easy to turn up the production as it was then.”

“we think there’s quite a bit more coal that needs to be purchased in 2014. You could start seeing some price appreciation as we move into next calendar year.”

“our [met coal] domestic customers continue to run their plants at pretty high capacity factors. They have been in the mid to high 70s most of the year. So, we think that the demand will be there. We’ve enjoyed a long-term relationship with our domestic customers I think.”

Walter Energy 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“As we look at the market, we continue to see the short-term outlook for hard coking coal pricing under pressure. We are being confronted with low operating levels at most steel mills, oversupply of hard coking coal in the market and an exchange rate, which is favoring Australian supply.”

“In South America, Brazil continues to show reduced production levels compared to 2012. However, most still anticipate an improvement in advance of the World Cup and Olympics. Europe continues to be soft with exception — with the exception of the U.K. which continued to show a steady production improvement, a trend we’ve seen since March”

“I did see where someone said they believed it was the low-vols and mid-vols that we’re in an oversupply situation. I tend to disagree with that. I think the steel mills still require the higher quality coals in order to maintain their coke strength and protect their blast and their coke ovens from the expansion of some of the lower quality coals. So what we’ve seen is we still have a very strong demand of our low- and mid-vol products. So I would tend to disagree with that.”

“Q3, we’ll strive to maintain our cost levels where they are. But it would be possible that they could go up slightly.”

“I think we saw spot pricing got as low as about $125 for the premium coals, and we’ve seen that creep back up in recent days to a little over $130. So while it’s still below the benchmark, we’re seeing it start to move north again.”

“I think the key messages were action-oriented and we’re going to make progress and we’re going to — and move very decisively and quickly.”

“We can only process a certain amount of coal on a monthly basis. So if we try to increase that amount, we would have to add additional shifts at the preparation plant and additional shifts at the mine in order to be able to dispose the additional refuse. And both of those would come with additional costs as well. The lowest cost alternative for us is to just bring that inventory through the process a little more slowly than we had originally anticipated, when prices were a little stronger than what they are.”

“I do think everyone is — as you read through all the reports, everyone is doing everything they can to reduce their costs. So that does move the marginal cost down a bit. But still, you’re going to end up with some of those third and fourth quartile mines just aren’t going to make it. So it’s just — it’s still just a matter of time to where those tons come out of the market.”

“We still have about 2 accounts left open, otherwise we’re probably 96% done [locked up for 3Q].”

“The Q2 price is well above the Q3 price. So I think we’re going to see prices come down in Q3 versus Q2.”

“we view with — liquidity comes from 3 areas or financial flexibility comes from 3 areas: operations, capital markets and asset sales. And we’re focused on all 3. I just pointed that out in the amendment, it doesn’t necessarily mean we’re focused on that one in particular. We’re looking at all alternatives. And we’d like to be aggressive and move decisively, but we’re not going to rule anything out and we’re not pointing to any one in particular at this point.”

“I don’t think you should read too much into the $250 million or as being the number, if I could. If an asset sale is underway and someone bids higher than $250 million, we will take the money. You can be sure of that.”

Arch Coal 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“On the domestic thermal front, we believe that we’re in early stages of a multiyear recovery from PRB. Natural gas prices are less of a headwind. Weather has normalized to some extent, and power demand’s up. Coal has regained ground in the electric generation market. U.S. production is down, and coal stockpiles at PRB soar [ph] plans are on the decline. In fact, we believe the summer burn season will drive days of the supply and PRB customers down to below the 5-year average. This trend is a significant turnaround from where we were just a year ago and is leading to increased customer interest in securing tonnage.”

“While met coal demand remains relatively stable, driven in part by solid utilization rates at U.S. steel mills, prices are muted, and supply rationalization to date has not been sufficient to balance the market.”

“Michael, if you just look at industry data for June 30, production industry was down about 20 million tons. A big part of that is, in fact, about 12 million or 13 million tons. We think cash is going to continue to be under pressure. We think you will continue to see that transition away from the thermal market into the met market, and there’ll be further pressure on shutdowns in terms of supply. If you look at gas prices right now at $3.50, Central App thermal coal will not dispatch at $3.50 gas. And we think PRB, Western Bit, even Illinois will do fine with gas prices in that level. But as you’ve heard me say many times, we need somewhere between $4.50 and $5 gas to allow the thermal coal to dispatch either. Internal forecast for 2013 at Central App about 20 million, 21 million tons down over 2012. So down around that 128 million ton range for this year. I think, quite frankly, from what we’ve seen first half, that may be high. So there might be more pressure on that the back half.”

“there still is exit supply in the market, and I — it’s a tough number to gauge, but I think we believe that somewhere between 15 billion and 25 billion tons on a worldwide basis. But it appears to be more heavily weighted towards low-vol coals, which is why I think you’re seeing the benchmark pricing down. Clearly, Australian dollar drop has helped those producers, but I think what’s being lost in this is the relative strength of the high-vol coals into Europe. We’re down through the year, maybe $5 or $8, but it’s not nearly the percentage of what we’re seeing in — on the benchmark pricing.”

“I got to tell you everybody in this environment is pretty inwardly focused, I would say. Not that you won’t see some M&A, but everybody’s focused on managing their balance sheet, making sure they get through this tough period, and let’s just see where goes. But if you’re a Central App supplier and you’ve got some higher costs and pretty much thermal coal and you don’t have any infrastructure in place to access the international markets, I think you’re going to be pretty challenged over the next couple of years. So whether they go away, become part of another company, I think time will tell.”

“we’ve got over 400 million tons of high-quality met with a cost structure we think can be competitive here and around the world. And we want to make sure that we protect those reserves and aren’t forcing them into a market that doesn’t want them.”

“Chris, as I indicated, in the 300 million ton [met] market, we think there is a pretty significant percentage of people that have economics that don’t work at 145…we think it’s probably at least 20%”

“I can tell you there’s a lot of high-cost met out there, whether it’s in the U.S., Australia or Canada. And those are things that some people are going to face between now and, say, over the next few quarters. So we think there’s rationalization coming. We just can’t tell you how quick that’s going to take place, but what we can tell you is Arch has got itself positioned where it will be standing when all this shakes out.”

“If you look globally, there’s 280 gigawatts of new coal power generation that are being built. I mean, these aren’t being discussed, planned. They are being built and are going to come on over the next 3 or 4 years, needing 800 million to 900 million tonnage of additional supplies. So all of those things, we think, will drive improvements in the market. I mean, it’s — as John talked about our cash position, we want to make sure that we got liquidity in place to get through this tough period. We can’t tell you if it’s 6 months, 12 months or 18 months, but what we can tell you is Arch will be around once we get through it.”