Consol closes first Asian coal sale

CONSOL Energy has concluded its first coking coal sale to an Asian customer under its month-old Asian marketing initiative with Xcoal.
Consol closes first Asian coal sale Consol closes first Asian coal sale Consol closes first Asian coal sale Consol closes first Asian coal sale Consol closes first Asian coal sale

A Consol Energy longwall

Donna Schmidt

The sale, which includes a Panamex vessel of about 82,000 short tons from the operator’s Bailey mine in Pennsylvania, is destined for merchant coke plants in the Tianjin/Guafeng area of China.

The transaction was inked by partner Xcoal, with which Consol teamed in December for its Asian marketing initiative.

The vessel will be loaded at Consol’s Baltimore Terminal in Maryland.

"Consol Energy is enthused that Xcoal was able to quickly validate the concept of marketing our Northern Appalachian coal to coke plants in Asia," president and chief executive Brett Harvey said.

"We have a lot more optionality with regard to our Northern Appalachian coal because of this initiative.”

Harvey confirmed that the specific terms of the deal would not be disclosed, but that Consol would obtain a “significant premium” for its Bailey mine output versus its local thermal market.

“I believe that this sale will immediately establish Consol as a premium brand in Asia," he added.

Consol will be represented exclusively in Asia by Xcoal at established offices in Beijing, Seoul, Tokyo and Singapore.

The initiative, which includes the marketing of its Appalachian metallurgical and thermal coal, was inked to take advantage of the region’s growing demand.

In a December announcement the producer noted that Xcoal will sell Consol-branded coal of metallurgical grade from the Buchanan mine in Virginia and the Bailey mine in Pennsylvania, as well as thermal output from its northern Appalachian properties.

All of the coal will be shipped from Consol’s Baltimore Terminal in Maryland. The company’s website states that 8.9 million tons were shipped from the terminal in 2008, 34% of which originated from its mines.

"There are several advantages for [the company] from this initiative – we’re leveraging the value of our low-vol Buchanan coal by blending it with our other coals that have met coal characteristics,” Harvey said at the time.

“Xcoal's Asian marketing experience coupled with the Consol brand should enable us to capture more value for our shareholders… [and] creates a potent partnership between Consol and Xcoal that establishes a meaningful presence for Consol and a platform for brand growth in the world's most rapidly growing region.”