Rhino throws off downturn to secure future

KENTUCKY operator Rhino Resource Partners has managed to secure a future for of its Central Appalachian coal mines in spite of the market downturn.

Staff Reporter

Rhino reported its 2012 Q4 results last week and despite a 26% fall in profits, the company said it was able to secure contracts for steelmaking coal at prices that would keep its four Central Appalachian mines running.

Rhino president and chief executive officer Dave Zatezalo said: "We have continued to deliver positive financial results despite the ongoing weakness in the met and steam coal markets.

“Our focus on safety and improved operating efficiency during 2012 has resulted in one of the best years for safety performance in our history.”

Profit fell 26% to $9.4 million in the fourth quarter, from $12.7 million a year earlier.

Total coal sales, including met and thermal, were 4.7 million tons in 2012, compared to 4.9 million tons for the year prior.

Rhino secured contracts this year to sell 919,160t of thermal coal – used in power generation – pushing total thermal coal sales contracts to about 3.5Mt.

The company has contracts to sell about 2.5Mt of thermal coal this year, Rhino said.

The four mines accounted for 55% of Rhino's total revenue in the fourth quarter, but could not prevent it falling 14% to $86.5 million.

Rhino said in its Q4 results that it idled operations in the region in June-July to reduce inventory and curb output. It also cut production at Rhino Eastern, its joint venture with Patriot Coal Corp in West Virginia.

Rhino’s active operations are in Northern and Central Appalachia and the Western bituminous region.

It has other natural resource holdings, including oil and gas and limestone.

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