INTERVIEW: Miner CCL's US high-vol B coal shipments to ramp up on strong export demand

Miner Coking Coal Pty Ltd. plans to ramp up shipments of its US high-volatile B coking coal from Norfolk Southern's Lamberts Point terminal this year and hit 3.5 million mt of shipments in 2025 as it completed reconnecting the historic Pardee mine to seaborne markets, executives said in an interview.

CCL's Pardee Black Bear project in Virginia has built a dedicated rail loadout and a new 3.5 million mt/year coal processing plant over the past year for coal sales across Europe, South America and Asia.

Black Bear high-vol B shipments are set to rise to 1.2 million-1.4 million mt/year by mid-2023 and expand to a 3.5 million mt/year rate by end-2024.

CCL has seen strong demand for Black Bear's high-vol B, especially in the Atlantic market which has been a key area of focus, CCL's Chief Marketing Officer Ty Zehir said in an interview from the company's headquarters in Calgary, Alberta. The market's familiarity with the previous Pardee coking coal facilitated trials and led quickly to commercial discussions, rather than prolonged technical deliberations, he said.

CCL focused on initial trials in 2021, previously trucking the coal to a preparation plant for shipments as it awaited completion of its dedicated loadout. Coronavirus-related delays over the past two years affected the recommissioning schedule, including waiting on equipment. All rail loadout and track upgrades are now complete, and the mine is capable of loading a 10,000 mt train in under four hours, CCL said.

CCL has increased coal reserves at Pardee to over 250 million mt, extending the life of mine to more than 50 years and aiding end-user certainty in supply planning, Zehir said.

"We initially had a 25-year life of mine with 150 million mt of reserves, and we have since added 100 million mt, increasing to 50 years," he said.

Pardee provides a flexible resource base, allowing CCL to operate a multi-mine complex with additional equipment to achieve higher annual output of 3.5 million mt, it said.

Black Bear's typical specifications include 35% volatile matter, ash at 6-7%, 0.8-0.9% sulfur, 30,000 ddpm, 0.001% phosphorus, 0.9-0.95 MMR.

Coronado Global Resources has supplied a high-vol A type coal from its Logan Country High Vol Complex under the Pardee name for export, which was railed via the CSX and shipped from Kinder Morgan's Pier 9, Hampton Roads.

The Pardee Underground Mining Complex is close to Kentucky, and was formerly operated by Arch Resources prior to its idling in 2016, during low prices. Now, coking coal prices have hit record levels through 2021. Supply disruptions and limited flexibility to bring on additional supplies supported the market, CCL co-founder James Chisholm said.

CCL plans to expand group coking coal output through further expansions and is yet to identify further acquisitions.

Bens Creek Group started production from a former high-vol B mine close by, selling the coal to trader Integrity. Developers see expanding demand for US high-vols while continuing with existing plans, such as the new Longview high-vol and Itmann low-vol mines in West Virginia.

Record high coking coal prices and tight US coking coal supplies led steelmakers to increasingly try out new coals and expand trials, according to market sources. However, buyers' focus may be shifting from coal quality, shipping reliability and pricing terms, to additional scrutiny around environmental credentials and supply chain transparency.

ESG focus

CCL is tuned into the broader themes of environmental, social and governance (ESG), and transparency enabling technology such as blockchains and fintech.

The executives' decades of coal industry experience in Australia, Canada and the US have pushed its strategy to embrace working with an ESG mindset, noting growing end-user demand for fuller transparency on cargo origins, associated production and operational data, along with associated emissions.

CCL seeks to serve growing interest from global steelmakers and trade finance circles for procurement of raw materials which facilitate auditing, management reporting and benchmarking, Chisholm said.

CCL is implementing blockchains across all mining and logistics operations and carbon projects focused on carbon removal, he said. This will provide an irreversible ledger of data and help with assurance.

CCL will be offering carbon-neutral coal, by adding permits through its own reforestation projects currently mainly in the US and Brazil and verifying the origin and provenance of the permits using blockchain, Chisholm added. CCL has worked on projects in the Pardee mine area and in Alberta, Canada, and recently focused on replanting in the US, and in areas affected with wildfires.

"In Australia, reforestation related to coal mines has been conducted for many years, and we see a move now increasingly using drones for distributing seedlings," Chishom said.

Black Bear high-vol B may be offered as "a neutral to negative carbon footprint" coal, delivered to plants, based on the permits used.

CCL can also offer companies purchasing its coal to support social projects invested through the sale of carbon permits from CCL's forestry and other projects.