American Carbon expands met coal mine capacity

Coal Insights Bureau

American Resources Corp’s (ARC) subsidiary American Carbon has expanded production at its Carnegie 2 metallurgical mine which will double the output at the mine.

The company is utilising existing equipment from its fleet to efficiently expand production and minimize the capex thereby increasing rate of return to shareholders. ARC said.

The capacity of the Carnegie 2 metallurgical carbon mine in Pike County, Kentucky, has been expanded by adding a second operating section.

“It is expected that the production from this section will initially ramp up to approximately 9,000 tons to 12,000 additional tons per month,” ARC said in a release.

Mark Jensen, CEO of American Resources commented, “Our McCoy Elkhorn complex is a showcase operation that possesses a significant opportunity for growth from our internal portfolio of assets. Adding a second operating section at this already producing mine is one of the highest margin growth opportunities we can execute upon as a company, given no additional fixed costs and minimal additional variable costs are needed to achieve the incremental growth of production. Now that this has been achieved, we look forward to focusing on additional growth expansion at the McCoy Elkhorn complex, while we continue to minimize capex costs and maximize speed to market.”

ARC over the years has acquired a significant fleet of underground and surface equipment that it can utilize to expand production.

The new expansion at Carnegie 2 is utilising almost entirely owned equipment that the Company has been able to acquire over the years.

The company is still in possession of over three additional full operating sections of equipment that it intends to use for Carnegie 1 expansion, the upcoming mine 15A expansion, as well as its Wyoming County Coal LLC complex that it is currently developing.

“In the current market, owning quality

Our McCoy Elkhorn complex is a showcase operation that possesses a significant opportunity for growth from our internal portfolio of assets. Adding a second operating section at this already producing mine is one of the highest margin growth opportunities we can execute upon as a company, given no additional fixed costs and minimal additional variable costs are needed to achieve the incremental growth of production. Now that this has been achieved, we look forward to focusing on additional growth expansion at the McCoy Elkhorn complex, while we continue to minimize capex costs and maximize speed to market.

Mark Jensen, CEO, American Resources

assets and equipment for efficient growth offers a significant competitive advantage, given the current tightness in the equipment and infrastructure marketplace,” the company said in a release.

Deep cut ops at Carnegie 1&2 to raise output

ARC in October 2022 received approval of the Mine Safety and Health Administration for a deep cut plan at its Carnegie 1 mine.

“A deep cut plan enables 30 percent additional production while reducing the movement of our mechanised equipment, which further reduces the potential for injury to our operating team, reduces travel time and wear and tear of the equipment. The company is also pursuing such approvals at our newly operating Carnegie 2 mine. Having these assets in place positions our carbon platform as one of the few in the industry that can organically expand production and feed the demand especially while older mines in our region are coming to end of life,” Tarlis Thompson, COO of American Resources commented.

ARC is now planning to undertake similar deep cut operations at Carnegie 2.

Plans to cash in on supply squeeze

ARC plans to cash in on the rising demand for met coal following removal of Covidrelated restriction in China and general supply squeeze.

“The company believes that the strength in the current carbon market will be further exemplified in 2023 for metallurgical carbon for steel production as China slowly emerges from Covid-related lock downs. Carnegie 1 and Carnegie 2 mines are underground room and pillar mines that are set up in a manner that will provide significant growth over the course of the next few years. The Company will achieve such growth and efficiencies with minimal capex by optimizing the operations through methods such as adding additional mining sections, now that mining has advanced further into the seam, and through deep cut mine plans at Carnegie 2, similar to those recently announced at Carnegie 1,” the company said.