Uinta Basin Q2'21 coal production ticks up 3.4% YOY

Coal production from the active mines in the Uinta Basin increased 3.4% year over year to 5.5 million tons in the second quarter, while output for the 12 months ended June 30 slipped 5.4%, according to data compiled by S&P Global Market Intelligence.

The Uinta Basin, which covers parts of Colorado and Utah, hosted 12 active mines during the recent quarter. The region's second-quarter production total of 5.5 Mt was an increase from both 5.4 Mt in the first quarter and 5.3 Mt in the same quarter of 2020.

Output from Uinta region mines trended downward on a year-to-date basis, with the exception of two Wolverine Fuels LLC-operated mines that were also two of the highest-producing mines for the quarter.

The Wolverine-operated Skyline No. 3 mine in Utah was the basin's top producer during the second quarter with output of 1.1 Mt, increasing from 584,000 tons in the first quarter and 815,000 tons in the second quarter of 2020.

The company's Sufco mine was the third-highest producer in the three-month period with 683,000 tons, down year over year from 875,000 tons and from its first-quarter total of 1.2 Mt. Wolverine is majority-owned by Galena Private Equity Resources Fund LP.

American Consolidated Natural Resources Inc.'s Lila Canyon mine produced 724,000 tons in the second quarter, which was the second-highest quarterly total in the region by mine. Output decreased both year over year from 1.0 Mt and quarter over quarter from 908,000 tons.

The U.S. Energy Information Administration said in its latest monthly Short Term Energy Outlook that it expects output from the country's coal mining sector to hit 607 Mt in 2021. The agency expects higher coal consumption from the domestic power sector due to high natural gas prices.

The EIA also projected thermal coal exports would reach 41.8 Mt in 2021 before increasing to 44.5 Mt in 2022, with the trend attributed to an ongoing trade dispute between China and Australia.

A lack of coal supply in the face of renewed global demand could create price volatility to the upside, Peabody Energy Corp. President and CEO Jim Grech said during a recent earnings call. During the second quarter, output at Peabody's Foidel Creek mine soared year over year to 393,000 tons from 34,000 tons, while decreasing from 535,000 tons in the first quarter. Peabody outlined plans in mid-2020 to furlough more than half of the Foidel Creek workforce due primarily to low demand and the impact of the pandemic.

Production at Arch Resources Inc.'s West Elk mine slipped year over year to 629,000 tons from 654,000 tons but increased quarter over quarter from 413,000 tons. The company has been transitioning away from the declining U.S. thermal coal markets by pivoting focus from utility customers to steelmaking coal markets.

Meanwhile, Southern Coal Corp.'s ADDCAR System 16 mine produced 254,000 tons of coal in the second quarter, compared to no output in the year-ago quarter, when the mine was temporarily closed, and 350,000 tons in the first quarter.