Almost half of NRP's income and revenue comes from met coal, Met coal at this date trades for about $165
per ton. This is at or below production cost for the miners. NRP can cover the distribution for one or two more quarters. They have $159 million in cash. After that, the payout drops or is eliminated unless met coal price improves. When will the price of met coal head up? THAT IS THE ISSUE.
The "real" issue here is why you are spreading false information..Got a short going? Having a tough day? Considering that Consol Energy just announced that the production costs of met coal produced at its' Buchanan Mine are at $64.42/ton....I think you need to get some updated info...the coal ships are still sailing , and the producers are profitable
Met coal prices seem to have fallen quite a bit, and CNX is a good example. From $ 168/ton in Q1 2012 to $ 103/ton in Q1 2013 for the low-vol met coal from Buchanan, a drop in price of just under 40%. The sample size is small, and may not be meaningful to other operators. But the point is that a good part of NRP's royalty income is based on the market price of the coal. A 40% drop in the price of met coal compared to Q1 2012 would really hurt NRP. SunCoke also showed a 30% drop in met coal pricing in Q1 vs last year's Q1. Not a good sign.
Hello, ayscuew. Thought I'd come back for a visit. I have no idea what to expect for Q1, but I'm interested. PVR's coal royalties dropped almost 33% in Q1 this year vs Q1 of last year, mostly due to lower CAPP production and lower royalty rates - all thermal, so I expected NRP to get hit on both sides, met and thermal. Then ARLP reported absolutely great numbers for Q1 - again, all thermal and mostly Illinois Basin. So I have no idea what to expect for NRP's thermal coal leases. PVR has not been a good indicator of NRP's thermal coal results, but neither has ARLP. CAPP is clearly a disaster and NRP hasn't moved enough into IB to make a difference, I think.
I haven't tried to follow met coal since I exited NRP last year so maybe I'm missing something.
And a PS....The massive,multi $Billion Vale Potash project in Argentina has just been postponed indefinitely...NRP's move into potash should now score very well...I don't see any problem collecting distributions for the next several years......