Pennsylvania’s largest coal company on Tuesday completed its merger with the nation’s second largest coal producer, creating an industry giant with 25 million tons annually of exporting capacity at a time when global coal use remains strong, according to industry observers.
Consol Energy Inc., of Cecil, and Arch Resources Inc., of St. Louis, combined to form Core Natural Resources Inc., a new company headquartered in Cecil.
The companies announced their intent to merge in August and on Jan. 9 stockholders approved the merger. The estimated value of the new company was $5.2 billion.
The new Core Natural Resources is well-positioned to compete and succeed in two significant, high-potential market segments — the global metallurgical and global high-rank thermal coal markets, said James Brock, former Consol CEO and Core’s executive chairman.
Erica Fisher, a spokeswoman for Consol Energy, could not be reached for comment.
Consol Energy, a successor to the Consolidation Coal Co. formed during the Civil War, brings its Pennsylvania Mining Complex in Southwestern Pennsylvania into the Core fold. The Bailey and Harvey mines in Greene County, the Enlow Fork Mine in Washington County, can produce a combined total of 28.5 million tons of coal annually, Consol said. It is developing the Itmann Mine near Grafton, W.Va., which has the capacity to produce 900,000 tons metallurgical coal, Consol said.
Coming into the merger, Consol said it has 584 million tons of coal reserve in Pennsylvania and another 28 million tons of coal in the Itmann Mine. It controls 1.3 billion tons of thermal coal in undeveloped mines and metallurgical coal reserves in major coal-producing basins in the eastern United States. Arch has coal mines in West Virginia and Wyoming.
The company is touting its export capabilities at a time when global coal use has rebounded strongly after plummeting during the pandemic, according to the International Energy Association, a Paris-based intergovernmental organization. The IEA predicted coal production would rise to 8.7 billion tonnes last year, which would be a record. However, Chinese coal consumption is expected to level off due to the massive expansion of renewables alongside strong growth in electricity demand, the IEA said.
Domestic coal miners have increasingly sought international markets, with countries like India and China being key export destinations. Coal companies are capitalizing on the heavy reliance on coal for generating electricity and for making steel in those regions, said IBISWorld, a coal research agency with offices in New York. China uses 30% more coal than all countries combined.
In the United States, however, coal production dropped about 3% in 2023, according to the U.S. Energy Information Agency. More troubling to the industry is that U.S. coal consumption decreased 17.4% in 2023. Even with the closing of coal-fired power plants like the one at Homer City, the electric power sector accounted for 91% of the total U.S. coal used in 2023, the EIA said.