Arch Coal, owner of the mammoth Black Thunder mine outside Wright, increased profits last year, and officials expect production in the Powder River Basin to remain stable in 2018.
One of the three large coal companies in Wyoming to file for Chapter 11 during the downturn, Arch made $2.3 billion in revenue its first full year out of bankruptcy, it reported Tuesday.
The St. Louis-based firm finished out 2017 with $238.5 million in net earnings.
The final quarter of the year was also positive for Arch, with an $81.3 million profit, in part due to a $34.8 million tax benefit made possible by the federal Tax Cuts and Jobs Act of 2017, the company reported Tuesday.
“We are proud of the financial results achieved in 2017,” said John W. Eaves, Arch’s chief executive officer in a statement.
Eaves said the firm was well positioned to take advantage of improvements in the international market, both in thermal coal and metallurgical coal — a coal not found in Wyoming that is largely used in steel production.
The CEO also credited Arch as anticipating “the eventual recovery in domestic thermal markets.”
Cheap natural gas has whittled down the coal industry in recent years and was one of the key factors that caused the coal bust of 2015 and 2016.
Wyoming provides the lion’s share of coal for electricity in the country and its large coal firms have noted the need to adapt operations in the Powder River Basin to meet changing demands in the market.
Companies have recently noted the particular challenge of unloading their lower-heat coal from Wyoming.
Cloud Peak Energy, a Gillette-based firm that operates the Antelope and Cordero Rojo mines, cited trouble justifying production of its lower heat-content coal, during a call with investors following the third quarter.
However, Arch was one of the few firms to report that it had practically sold out of its low-heat coal from the Powder River Basin in the fall.
Arch’s coal sales in 2017 fell by about 2.2 million tons due to weak demand, an overstock of coal and a late start to the winter, the company reported Tuesday.
Though stockpiles of coal have fallen since the glut that contributed to the downturn, Arch reported a drawdown in the overstock since January. Its outlook for the Powder River Basin remained positive.
“Arch continues to believe that U.S. generators have a significant amount of tonnage to buy for the remainder of 2018, and expects increased activity as we progress through the first half of the year,” the company reported Tuesday.
Peabody Energy, which reported its earnings last week, also announced strong profits, but called for a moderate decrease in production in Wyoming for the year ahead, anticipating reduced demand due to coal plant closures. Cloud Peak reports its fourth quarter results and 2017 earnings Thursday.