Rhino to keep Central Appalachian coal mines open on contract wins
Feb 28 (Reuters) - Coal miner Rhino Resource Partners LP's quarterly profit fell as coal prices remained weak but the company said it managed to secure contracts for steelmaking coal at prices enough to keep its Central Appalachian mines running.
Miners such as Alpha Natural Resources, Consol Energy Inc, Arch Coal Inc have shut production as prices of steelmaking, or metallurgical, coal have plunged about 50 percent from their 2011 highs.
Rhino, which operates four mines in Central Appalachia, idled its operations in the region during June and the first week of July to reduce inventory and curb output.
The Central Appalachian mines accounted for 55 percent of Rhino's total revenue in the fourth quarter.
Appalachia, which spans several states in eastern United States including Kentucky, Pennsylvania, Virginia and West Virginia, has one of the world's richest deposits of high-grade coal used to make steel.
Rhino said it also reduced production at Rhino Eastern, its joint venture with Patriot Coal Corp in West Virginia.
Rhino holds a 51 percent stake in Rhino Eastern.
Patriot Coal filed for bankruptcy in July last year, hit by weak coal prices and low demand from electricity producers who have turned to cheaper natural gas.
Profit fell 26 percent to $9.4 million, or 33 cents per share, in the fourth quarter, from $12.7 million, or 45 cents per share, a year earlier.
Revenue fell 14 percent to $86.5 million.
In Central Appalachia, Rhino secured contracts to sell 919,160 tons of thermal coal -- used in power generation -- this year, pushing total thermal coal sales contract to about 3.5 million tons.
Total coal sales, including met and thermal, were 4.7 million tons in 2012.
For 2014, the company has contracts to sell about 2.5 million tons of thermal coal till date, Rhino said.
Rhino's shares, which have fallen about 28 percent in the last year, closed at $14.11 on the New York stock Exchange on Wednesday.