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Ramaco reports $24M in revenue on Q4'17 coal sales, high expectations for 2018

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Ramaco reports $24M in revenue on Q4'17 coal sales, high expectations for 2018

Ramaco Resources Inc. reported total revenue of $24 million on sales of 265,000 tons of coal for the final quarter of 2017, in a preliminary earnings report released Feb. 22.

The relatively new company reported that it produced 275,000 tons of coal in the fourth quarter and 548,000 tons in full year 2017 following developing and activating two underground coal mines and a surface mine at its Elk Creek mining complex in West Virginia. Ramaco reported it also began production at a third underground mine in January and started up a new preparation plant and rail load-out facility.

"Our reserve base continues to present advantaged geologic characteristics. We have several factors at work here: relatively thick coal seams at our deep mines, the ability to utilize low-cost highwall miners at our surface mine, and desirable metallurgical coal qualities," Ramaco Executive Chairman Randall Atkins said in the release. "We believe that once we are at full production, these characteristics will contribute to a production profile that will allow us to achieve a cash cost of production significantly below most U.S. metallurgical coal producers."

Atkins said the company is looking forward to 2018, guiding to production and sales volumes of approximately 2 million to 2.2 million tons. Ramaco reported that roughly 71% of its estimated 2018 coal sales volumes are already locked into sales commitments. The company's remaining 500,000 to 1 million uncommitted tons are expected to be sold into export markets.

Ramaco also anticipates reducing its cash cost per ton of coal it produces to between $58 and $61. The company reported its average cost in the fourth quarter was $63/ton and the full-year average cost was $76/ton.

Capital expenditures are estimated to range from $20 million to $25 million in 2018, and the company expects to pay no cash taxes in the year.