10q10k10q10k.net

What changed in Ramaco Resources, Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Ramaco Resources, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+410 added−326 removedSource: 10-K (2024-03-14) vs 10-K (2023-03-14)

Top changes in Ramaco Resources, Inc.'s 2023 10-K

410 paragraphs added · 326 removed · 252 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

111 edited+18 added−23 removed125 unchanged
Biggest changeThe Patient Protection and Affordable Care Act of 2010 includes significant changes to the federal black lung program including an automatic survivor benefit paid upon the death of a miner with an awarded black lung claim and the establishment of a rebuttable presumption with regard to pneumoconiosis among miners with 15 or more years of coal mine employment that are totally disabled by a respiratory condition.
Biggest changeUnder the Black Lung Benefits Revenue Act of 1977 and the Black Lung Benefits Reform Act of 1977, as amended in 1981, each coal mine operator must pay federal black lung benefits to claimants who are current and former employees and also make payments to a trust fund for the payment of benefits and medical expenses to claimants who last worked in the coal industry prior to January 1, 1970. 14 Table of Contents The Patient Protection and Affordable Care Act of 2010 includes significant changes to the federal black lung program including an automatic survivor benefit paid upon the death of a miner with an awarded black lung claim and the establishment of a rebuttable presumption with regard to pneumoconiosis among miners with 15 or more years of coal mine employment that are totally disabled by a respiratory condition.
Compliance with these laws and regulations may be costly and time-consuming, delay commencement, continuation or expansion of exploration or production at our facilities, and depress demand for our products by imposing more stringent requirements and limits on our customers’ operations. Moreover, these laws are constantly evolving and the trend has been for increasingly complex and stringent regulation over time.
Compliance with these laws and regulations may be costly and time-consuming, delay the commencement, continuation or expansion of exploration or production at our facilities, and depress demand for our products by imposing more stringent requirements and limits on our customers’ operations. Moreover, these laws are constantly evolving, and the trend has been for increasingly complex and stringent regulation over time.
Affected power plants have sought to reduce sulfur dioxide emissions by switching to lower sulfur fuels, installing pollution control devices, reducing electricity generating levels or purchasing or trading sulfur dioxide emission allowances. These reductions could impact our customers in the electric generation industry. These requirements are not supplanted by CSAPR. ● NAAQS for Criterion Pollutants.
Affected power plants have sought to reduce sulfur dioxide emissions by switching to lower sulfur fuels, installing pollution control devices, reducing electricity generating levels or purchasing or trading sulfur dioxide emission allowances. These reductions could impact our customers in the electric generation industry. These requirements are not supplanted by the CSAPR. ● NAAQS for Criterion Pollutants.
We or prospective customers may also have to invest in carbon dioxide capture and storage technologies in order to burn coal and comply with future GHG emission standards. Finally, there have been attempts to encourage the reduction of coalbed methane emissions because methane has a greater GHG effect than carbon dioxide and can give rise to safety concerns.
We or our prospective customers may also have to invest in carbon dioxide capture and storage technologies in order to burn coal and comply with future GHG emission standards. Finally, there have been attempts to encourage the reduction of coalbed methane emissions because methane has a greater GHG effect than carbon dioxide and can give rise to safety concerns.
The CAA requires the EPA to set standards, referred to as National Ambient Air Quality Standards (“NAAQS”), for six common air pollutants: carbon monoxide, nitrogen dioxide, lead, ozone, particulate matter and sulfur dioxide. Areas that are not in compliance (referred to as “non-attainment areas”) with these standards must take steps to reduce emissions levels.
The CAA requires the EPA to set standards, referred to as National Ambient Air Quality Standards (“NAAQS”), for six common air pollutants: carbon monoxide, nitrogen dioxide, lead, ozone, particulate matter (“PM”) and sulfur dioxide. Areas that are not in compliance (referred to as “non-attainment areas”) with these standards must take steps to reduce emissions levels.
Purchased coal is complementary from a blending standpoint with our produced coals or it may also be sold as an independent product. Demonstrating Excellence in Safety and Environmental Stewardship. We are committed to complying with both regulatory and our own high standards for environmental and employee health and safety requirements.
Purchased coal is complementary from a blending standpoint with our produced coals or it may also be sold as an independent product. Demonstrating Excellence in Safety and Environmental Stewardship. We are committed to complying with both regulatory and our high standards for environmental and employee health and safety requirements.
A permit for our Squire Jim seam room-and-pillar underground mine was issued during 2020 and contains a large area of Squire Jim seam coal deposits. The Squire Jim seam of coal is the lowest known coal seam on the geologic column in this region, and due to depth of cover has never been significantly explored.
A permit for our Squire Jim seam room-and-pillar underground mine was issued in 2020 and contains a large area of Squire Jim seam coal deposits. The Squire Jim seam of coal is the lowest known coal seam on the geologic column in this region, and due to the depth of cover has never been significantly explored.
We are required to comply with numerous other federal, state, and local environmental laws and regulations in addition to those previously discussed. These additional laws include but are not limited to the Safe Drinking Water Act, the Toxic Substances Control Act, and the Emergency Planning and Community Right-to-Know Act.
We are required to comply with numerous other federal, state, and local environmental laws and regulations in addition to those previously discussed. These additional laws include but are not limited to the Safe Drinking Water Act, the Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know Act and similar state laws.
We began mine development on the Amonate Assets shortly after the acquisition. Production began in the first quarter of 2022. The preparation plant and rail loading facility were refurbished during 2022 and began operation in the fourth quarter of 2022. Rail service is provided by Norfolk Southern.
We began mine development on the Amonate Assets shortly after acquisition, and production began in the first quarter of 2022. The preparation plant and rail loading facility were refurbished in 2022 and began operation in the fourth quarter of 2022. Rail service is provided by Norfolk Southern.
Our operations are located in West Virginia, Virginia, and Pennsylvania, which have achieved primary jurisdiction for enforcement of SMCRA through approved state programs. The SMCRA imposes a complex set of requirements covering all facets of coal mining.
Our operations are located in West Virginia and Virginia, which have achieved primary jurisdiction for enforcement of SMCRA through approved state programs. The SMCRA imposes a complex set of requirements covering all facets of coal mining.
The Inflation Reduction Act of 2022 also provides significant funding and incentives for research and development of low-carbon energy production methods, carbon capture, and other programs directed at addressing climate change.
The law provides significant funding and incentives for research and development of low-carbon energy production methods, carbon capture, and other programs directed at addressing climate change. The Inflation Reduction Act of 2022 also provides significant funding for research and development of low-carbon energy production methods, carbon capture, and other programs directed at addressing climate change.
We have a comprehensive health and safety program based on the core belief that all accidents and occupational illnesses are preventable.
Safety Philosophy. We have a comprehensive health and safety program based on the core belief that all accidents and occupational illnesses are preventable.
Environmental, Health and Safety and Other Regulatory Matters Our operations are subject to numerous federal, state, and local environmental, health and safety laws and regulations, such as those relating to permitting and licensing matters, employee health and safety, reclamation and restoration of mining properties, water discharges, air emissions, plant and wildlife protection, the storage, treatment and disposal of certain materials (including solid and hazardous wastes), remediation of contaminants, surface subsidence from underground mining and the effects of mining on surface water and groundwater conditions.
Environmental, Health and Safety and Other Regulatory Matters Our operations are subject to numerous federal, state, and local environmental, health and safety laws and regulations, such as those relating to permitting and licensing matters, employee health and safety, reclamation and restoration of mining properties, water discharges, air emissions, plant and wildlife protection, the storage, treatment and disposal of certain materials (including solid and hazardous wastes), remediation of contaminated sites, surface subsidence from underground mining and the effects of mining on surface water and groundwater conditions.
We plan to complete development of our existing properties and increase annual production over the next few years to approximately 6.5 million clean tons of metallurgical coal, subject to market conditions, permitting and additional capital deployment. We may also acquire additional reserves or infrastructure that contribute to our focus on advantaged geology and lower costs. Being a Low-Cost U.S.
We plan to complete development of our existing properties and increase annual production over the next few years to approximately seven million clean tons of metallurgical coal, subject to market conditions, permitting, and additional capital deployment. We may also acquire additional reserves or infrastructure that contribute to our focus on advantaged geology and lower costs. Being a Low-Cost U.S.
Carbon is the primary element which remains when the volatiles are released. Our Strategy Our business strategy is to increase stockholder value through sustained earnings growth, cash flow generation and dividends by: Developing and Operating Our Metallurgical Coal Properties.
Carbon is the primary element that remains when the volatiles are released. Our Strategy Our business strategy is to increase stockholder value through sustained earnings growth, cash flow generation and dividends by: Developing and Operating Our Metallurgical Coal Properties.
We control the majority of the coal and related mining rights within the existing permitted areas and our current mine plans, as well as the surface for our surface facilities, through lease agreements with McDonald Land Company.
We control the majority of the coal and related mining rights within the existing permitted areas and our current mine plans, as well as the surface for our surface facilities, through lease agreements with McDonald Land Company among others.
The $1 trillion legislative infrastructure package passed by Congress in November 2021 includes a number of climate-focused spending initiatives targeted at climate resilience, enhanced response and preparation for extreme weather events, and clean energy and transportation investments. In August 2022, President Biden signed the Inflation Reduction Act of 2022 into law.
The $1 trillion legislative infrastructure package passed by Congress in November 2021 includes a number of climate-focused spending initiatives targeted at climate resilience, enhanced response and preparation for extreme 16 Table of Contents weather events, and clean energy and transportation investments. In August 2022, President Biden signed the Inflation Reduction Act of 2022 into law.
There is also increasing interest in nature-related matters beyond protected species, such as general biodiversity, which may similarly require us or our customers to incur costs or take measures which may adversely impact our business or operations. Use of Explosives. Our surface mining operations are subject to numerous regulations relating to blasting activities.
There is also increasing interest in nature-related matters 19 Table of Contents beyond protected species, such as general biodiversity, which may similarly require us or our customers to incur costs or take measures which may adversely impact our business or operations. Use of Explosives. Our surface mining operations are subject to numerous regulations relating to blasting activities.
We intend to maintain a credit profile that precludes the need to post collateral for our surety bonds. Nonetheless, our surety has the right to demand additional collateral at its discretion. Some international customers require new suppliers to post performance guarantees during the initial stages of qualifying to become a long-term supplier.
We intend to maintain a credit profile that precludes the need to post collateral for our surety bonds. Nonetheless, our surety has the right to demand additional collateral at its discretion. 13 Table of Contents Some international customers require new suppliers to post performance guarantees during the initial stages of qualifying to become a long-term supplier.
Any 5 Table of Contents supply shortfall out of Australia, or increase in global demand beyond Australia’s capacity, has historically been serviced by U.S. and Canadian metallurgical coal producers. Export metallurgical coal pricing is determined utilizing a series of indices from a number of independent sources and is adjusted for coal quality.
Any supply shortfall out of Australia, or increase in global demand beyond Australia’s capacity, has historically been serviced by U.S. and Canadian metallurgical coal producers. Export metallurgical coal pricing is determined utilizing a series of indices from a number of independent sources and is adjusted for coal quality.
If new laws or regulations were introduced to reduce coalbed methane emissions, those rules could adversely affect our costs of operations by requiring installation of air pollution controls, higher taxes, or costs incurred to purchase credits that permit us to continue operations. Clean Water Act.
If new laws or regulations were introduced to reduce coalbed methane emissions, those rules could adversely affect our costs of operations by requiring installation of air pollution controls, higher taxes, or costs incurred to purchase credits that permit us to continue operations. 17 Table of Contents Clean Water Act.
As part of the transaction, we assumed existing mining permits issued by the West Virginia Department of Environmental Protection, which authorize mining by both surface and highwall mining methods as well as by underground methods.
As part of the transaction, we assumed existing mining permits issued by the West Virginia Department of Environmental Protection, which authorizes mining by both surface and highwall mining methods as well as by underground methods.
In 2020, we suspended development at the Berwind Complex due to lower pricing and demand largely caused by the economic effects of COVID-19. In early 2021, as pricing and demand improved, Berwind development resumed, and we successfully reached the Pocahontas No. 4 seam in late 2021.
In 2020, we suspended development at the Berwind Complex due to lower pricing and demand largely caused by the economic effects of COVID-19. In early 2021, as pricing and demand improved, Berwind development resumed, and we successfully reached the Pocahontas No. 4 seam 8 Table of Contents in late 2021.
The RCRA and corresponding state laws establish standards for the management of solid and hazardous wastes generated at our various facilities. Besides affecting current waste disposal practices, the RCRA also addresses the environmental effects of certain past hazardous waste treatment, storage and disposal practices.
The RCRA and corresponding state laws establish standards for the management of solid and hazardous wastes generated at our various facilities. Besides affecting current waste disposal practices, the RCRA also addresses the environmental effects of certain past hazardous waste treatment, storage and 18 Table of Contents disposal practices.
In the course of such evaluations, an agency will 19 Table of Contents typically prepare an environmental assessment to determine the potential direct, indirect and cumulative impacts of a proposed project. Where the activities in question have significant impacts to the environment, the agency must prepare an environmental impact statement.
In the course of such evaluations, an agency will typically prepare an environmental assessment to determine the potential direct, indirect and cumulative impacts of a proposed project. Where the activities in question have significant impacts to the environment, the agency must prepare an environmental impact statement.
For example, prior to placing fill material in waters of the United States, such as with the construction of a valley fill, coal mining companies are required to obtain a permit from the Corps under Section 404 of 17 Table of Contents the CWA.
For example, prior to placing fill material in waters of the United States, such as with the construction of a valley fill, coal mining companies are required to obtain a permit from the Corps under Section 404 of the CWA.
In addition, contamination caused by the past disposal of coal combustion residuals, including coal ash, could lead to material liability for our customers under the RCRA or other federal or state laws and potentially further reduce the demand for coal.
In addition, contamination caused by the past disposal of CCR, including coal ash, could lead to material liability for our customers under the RCRA or other federal or state laws and potentially further reduce the demand for coal.
At this point, we do not anticipate activating this mining permit. 8 Table of Contents In December 2021, we acquired the Amonate Assets from Coronado, pursuant to an asset purchase agreement. The acquisition included a mine complex located in McDowell County, West Virginia and Tazewell County, Virginia adjacent and contiguous to the Company’s existing Berwind Complex.
At this point, we do not anticipate activating this mining permit. In December 2021, we acquired the Amonate Assets from Coronado, pursuant to an asset purchase agreement. The acquisition included a mine complex located in McDowell County, West Virginia and Tazewell County, Virginia adjacent and contiguous to the Company’s existing Berwind Complex.
Additionally, in December 2016, Congress passed the Water Infrastructure Improvements for the Nation Act, which provided for the establishment of state and EPA permit programs for the control of coal combustion residuals and authorizes states to incorporate the EPA’s final rule for coal combustion residuals or develop other criteria that are at least as protective as the final rule.
Additionally, in December 2016, Congress passed the Water Infrastructure Improvements for the Nation Act, which provided for the establishment of state and EPA permit programs for the control of CCR and authorizes states to incorporate the EPA’s final rule for CCR or develop other criteria that are at least as protective as the final rule.
These changes could have a material impact 14 Table of Contents on our costs expended in association with the federal black lung program. In addition to possibly incurring liability under federal statutes, we may also be liable under state laws for black lung claims. Clean Air Act.
These changes could have a material impact on our costs expended in association with the federal black lung program. In addition to possibly incurring liability under federal statutes, we may also be liable under state laws for black lung claims. Clean Air Act.
We have spent limited amounts of capital to review the feasibility of a high-vol A metallurgical deep mine in the Jawbone seam of coal. This seam is located slightly above the Tiller Seam and would be accessed via a short slope from within the existing Tiller seam mine.
The Company has spent limited amounts of capital to review the feasibility of a high-vol A metallurgical deep mine in the Jawbone seam of coal. This seam is located slightly above the Tiller Seam and would be accessed via a short slope from within the existing Tiller seam mine.
One is a deep mine permit in the Jawbone Seam, a geologically advantaged metallurgical coal reserve and resource. The second is a metallurgical surface mine in the Tiller seam that is mined via surface and highwall mining methods. In August 2021, we began production at this new surface mine known as the Big Creek mine.
One is a deep mine permit in the Jawbone Seam, a geologically advantaged metallurgical coal reserve and resource. The second is a metallurgical surface mine in the Tiller seam that is mined via surface and highwall mining methods. In August 2021, we began production at the Big Creek surface mine.
The following is a summary of the various federal and state environmental and similar regulations that have a material impact on our business: 11 Table of Contents Surface Mining Control and Reclamation Act.
The following is a summary of the various federal and state environmental and similar regulations that have a material impact on our business: Surface Mining Control and Reclamation Act.
Should our permitting efforts become subject to such challenges, the permits may not be issued in a timely fashion, may impose requirements which restrict our ability to conduct our mining operations or to do so profitably, or may not be issued at all.
Should our permitting efforts become subject to such challenges, the permits may not be issued in a timely fashion, may impose requirements which restrict our ability to conduct our mining 12 Table of Contents operations or to do so profitably, or may not be issued at all.
Various state and local governments have also publicly committed to furthering the goals of the Paris Agreement. International commitments, reentry into the Paris Agreement and President Biden’s executive orders may result in the development of additional regulations or changes to existing regulations.
Various state and local governments have also publicly committed to furthering the goals of the Paris Agreement. International commitments, reentry into the Paris Agreement and President Biden’s executive orders may result in the development of additional regulations or changes to existing regulations that may impact our business.
For instance, waters that states have designated as impaired (i.e., as not meeting present water quality standards) are subject to Total Maximum Daily Load (“TMDL”) regulations, which may lead to the adoption of more stringent discharge standards for our coal mines and could require more costly treatment.
For instance, waters designated by states as impaired (i.e., as not meeting current water quality standards) are subject to Total Maximum Daily Load (“TMDL”) regulations, which may lead to the adoption of more stringent discharge standards for our coal mines and could require more costly treatment.
The EPA has adopted NAAQS for carbon monoxide, nitrogen dioxide, sulfur dioxide, particulate matter and ground-level ozone. The CAA further requires the EPA to periodically review and revise the NAAQS, resulting in the trend of more stringent standards over time.
The EPA has adopted NAAQS for carbon monoxide, nitrogen dioxide, lead, sulfur dioxide, PM and ground-level ozone. The CAA further requires the EPA to periodically review and revise the NAAQS, resulting in the trend of more stringent standards over time.
U.S. metallurgical coal exports are primarily sold to buyers in the Atlantic Basin market (customers in Europe, Brazil and Africa), and serve as swing supply to buyers in the Pacific Basin (customers in India, South Korea, Japan and China).
U.S. metallurgical coal exports are primarily sold to buyers in the Atlantic Basin market (customers in Europe, Brazil and Africa), and serve as swing supply to buyers in the Pacific Basin (customers in India, South Korea, 5 Table of Contents Japan and China).
Expenditures relating to environmental compliance are a major cost consideration for our operations and safety and compliance is a significant factor in mine design, both to meet regulatory requirements and to minimize long-term environmental liabilities.
Expenditures relating to environmental compliance are a major cost consideration for our operations and safety and 11 Table of Contents compliance is a significant factor in mine design, both to meet regulatory requirements and to minimize long-term environmental liabilities.
The Berwind Complex experienced an ignition event during 2022 that resulted in idling mining operations for one of the active mines. Production restarted for the idle mine in the first quarter of 2023. Our Knox Creek facility includes a preparation plant and 74,400 acres of controlled mineral rights that we expect to develop in the future.
The Berwind Complex experienced an ignition event in 2022 that resulted in idling mining operations for one of the active mines. Production restarted for the idle mine in the first quarter of 2023. Our Knox Creek Complex includes a preparation plant and 64,050 acres of controlled mineral rights that we expect to develop in the future.
To date we have not had to provide a performance guarantee, but it is possible that such a guarantee could be required in the future. 13 Table of Contents Mine Safety and Health.
To date we have not had to provide a performance guarantee, but it is possible that such a guarantee could be required in the future. Mine Safety and Health.
Because coal mining operations emit particulate matter and sulfur dioxide, our mining operations could be affected when the new standards are implemented by the states. ​ ● Mercury and Hazardous Air Pollutants .
Because 15 Table of Contents coal mining operations emit particulate matter and sulfur dioxide, our mining operations could be affected when the new standards are implemented by the states. ​ ● Mercury and Hazardous Air Pollutants .
The Berwind property consists of approximately 62,500 acres of controlled mineral rights, including the December 2021 acquisition of “Amonate Assets” from subsidiaries of Coronado Global Resources Inc. (“Coronado”) as described under “Our Projects – Berwind” below. The Amonate Assets include a processing plant located in our Berwind Complex, saving us transportation costs to our Knox Creek plant 26 miles away.
The Berwind property consists of approximately 62,500 acres of controlled mineral rights, including the December 2021 acquisition of “Amonate Assets” from subsidiaries of Coronado Global Resources Inc. (“Coronado”) in 2021. The Amonate Assets include a processing plant located in our Berwind Complex, saving us transportation costs to our Knox Creek plant 26 miles away.
This equipment allows us to process all waste material for placement in areas designed for combined refuse disposal and maximize the life for disposal of fine waste rock in the pool of the impoundment. A large portion of our controlled reserves are permitted through existing, issued permits.
This equipment allows us to process all waste material for placement in areas designed for combined refuse disposal and maximize the life for disposal of fine waste rock in the pool of the impoundment. A large portion of our controlled reserves are permitted through existing, issued permits, and we continue actively pursuing multiple new permits.
Other species in the vicinity of our operations may have their listing status reviewed in the future and could also become protected under the ESA. In addition, the USFWS has identified bald eagle habitats in some of the counties where we operate.
Several species indigenous to the areas in which we operate are protected under the ESA. Other species in the vicinity of our operations may have their listing status reviewed in the future and could also become protected under the ESA. In addition, the USFWS has identified bald eagle habitats in some of the counties where we operate.
We have 62 million and 1,156 million measured and indicated tons of high-quality metallurgical coal reserves and resources, respectively, with attractive quality characteristics across high-volatility and low-volatility segments. This geologically advantaged resource and reserve base allows for flexible capital spending in challenging market conditions.
We have 59 million reserve tons and 1,119 million measured and indicated resource tons of high-quality metallurgical coal with attractive quality characteristics across high-volatility and low-volatility segments. This geologically advantaged resource and reserve base allows for flexible capital spending in challenging market conditions.
We are a pure play metallurgical coal company with 62 million reserve tons and 1,156 million measured and indicated resource tons of high-quality metallurgical coal. We believe our advantaged reserve geology provides us with higher productivities and industry leading lower cash costs. Our development portfolio primarily includes the following properties: Elk Creek, Berwind, Knox Creek and RAM Mine.
We are a pure play metallurgical coal company with 59 million reserve tons and 1,119 million measured and indicated resource tons of high-quality metallurgical coal. We believe our advantaged reserve geology provides us with higher productivity and industry-leading lower cash costs. Our development portfolio primarily includes the following properties: Elk Creek, Berwind, Knox Creek, and Maben.
The Maben Coal acquisition in 2022 provides the Company with 28,000 leased acres of controlled mineral rights, which includes coal deposits that may be mined currently by surface and high wall mining methods as well as developed in the future through deep mining.
The Maben Coal acquisition in 2022 provides the Company with 28,000 leased acres of controlled mineral rights, which includes coal deposits that may be mined currently by surface and high wall mining methods as well as developed in the future through deep mining. Our RAM Mine property is located in southwestern Pennsylvania.
In connection with CORE, the Company holds 53 intellectual property patents and pending patents related to the conversion of low-cost carbon ore into higher value carbon products as well as exclusive licensing agreements, all of which have a remaining duration of 15-20 years.
In connection with our advanced carbon products business, the Company holds 61 intellectual property patents and pending patents related to the conversion of low-cost carbon ore into higher-value carbon products as well as exclusive licensing agreements, all of which have a remaining duration of 14-20 years.
The key to excellent safety is employee involvement and engagement. We foster direct employee involvement in a number of ways including audit participation, accident investigations, as training resources and through solicitation of ideas in small group meetings and through anonymous workplace observation suggestion boxes. ● Positive Reinforcement . Establishing safety as a core belief is paramount to our safety performance.
The key to excellent safety is employee involvement and engagement. We foster direct employee involvement in a number of ways including audit participation, accident investigations, as training resources and through solicitation of ideas in small group meetings and through anonymous workplace observation suggestion boxes. 21 Table of Contents ● Positive Reinforcement .
As used herein, “Ramaco Resources,” “the Company,” “we,” “our,” and similar terms include Ramaco Resources, Inc. and its subsidiaries, unless the context indicates otherwise. General We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania.
Our principal corporate offices are located in Lexington, Kentucky. As used herein, “Ramaco Resources,” “Ramaco,” “the Company,” “we,” “us,” or “our,” and similar terms include Ramaco Resources, Inc. and its subsidiaries, unless the context indicates otherwise. General We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia and southwestern Virginia.
We view Berwind as the second flagship complex for Ramaco. Development of our Berwind Complex began in late-2017 in the thinner Pocahontas No. 3 seam and has since sloped up to current mining in the thicker Pocahontas No. 4 seam.
We estimate that the mine life for the Berwind Complex is over 20 years. We view Berwind as the second flagship complex for Ramaco. Development of our Berwind Complex began in late 2017 in the thinner Pocahontas No. 3 seam and has since sloped up to current mining in the thicker Pocahontas No. 4 seam.
Our human capital resources objectives include, as applicable, identifying, recruiting, training, retaining, incentivizing and integrating our existing and additional employees. We also depend on experienced 20 Table of Contents contractors and third-party consultants to conduct some of our day-to-day activities. We plan to continue to use the services of many of these contractors and consultants. Safety Philosophy.
We believe we have good relations with our employees. Our human capital resources objectives include, as applicable, identifying, recruiting, training, retaining, incentivizing and integrating our existing and additional employees. We also depend on experienced contractors and third-party consultants to conduct some of our day-to-day activities. We plan to continue to use the services of many of these contractors and consultants.
As of December 31, 2022, our estimated aggregate annual production capacity is approximately 2.7 million clean tons of coal. We plan to complete development of our existing properties and increase annual production over the next few years to approximately 6.5 million clean tons of metallurgical coal annually, subject to market conditions, permitting, and additional capital deployment.
As of December 31, 2023, our estimated aggregate annual production capacity is just under four million clean tons of coal. We plan to complete development of our existing properties and increase annual production over the next few years to approximately seven million clean tons of metallurgical coal annually, subject to market conditions, permitting, and additional capital deployment.
Such retirements would likely adversely impact our business. Global Climate Change. Climate change continues to attract considerable public and scientific attention. There is widespread concern about the contributions of human activity to such changes, especially through the emission of GHGs.
Global Climate Change. Climate change continues to attract considerable public and scientific attention. There is widespread concern about the contributions of human activity to such changes, especially through the emission of GHGs.
We may also acquire additional reserves or infrastructure that contribute to our focus on advantaged geology and lower costs. Metallurgical Coal Industry Metallurgical coal is also known as “met coal “ or “coking coal,” and is a key component of the blast furnace steelmaking process.
We may also acquire additional reserves or infrastructure that contribute to our focus on advantaged geology and lower costs. Metallurgical Coal Industry Metallurgical coal, also known as “met coal “ or “coking coal,” is a key component of the blast furnace steelmaking process and, therefore, demand for such coal is highly correlated with conditions in the steel industry.
We had 725 employees as of December 31, 2022, including our named executive officers, and nearly all of our employees are full-time employees. None of our employees are covered by collective bargaining agreements, and we have not experienced any strikes or work stoppages related to labor relation issues. We believe we have good relations with our employees.
We had 811 employees as of December 31, 2023, including our named executive officers, and nearly all of our employees are full-time employees. None of our employees are covered by collective bargaining agreements, and we 20 Table of Contents have not experienced any strikes or work stoppages related to labor relation issues.
In addition, the disposal, release or spilling of some products used by coal companies in operations, such as chemicals, could trigger the liability provisions of CERCLA or similar state laws.
In addition, the disposal, release or spilling of some products used by coal companies in operations, such as chemicals listed as hazardous substances under CERCLA, could trigger the liability provisions of CERCLA or similar state laws. The EPA periodically evaluates the CERCLA list of hazardous substances.
Knox Creek Mining Complex The Knox Creek Complex consists of approximately 74,400 acres of controlled mineral, a 750 tons per hour preparation plant and a coal-loading facility along with a refuse impoundment. Rail service is provided by Norfolk Southern. The Tiller Mine slope face-up and shafts were idled before our acquisition of the property.
Knox Creek Mining Complex The Knox Creek Complex consists of approximately 64,050 acres of controlled mineral rights as well as a preparation plant, a coal-loading facility, and a refuse impoundment. Rail service is provided by Norfolk Southern. The Tiller Mine slope face-up and shafts were idled before our acquisition of the property.
Thus, we may be subject to liability under CERCLA and similar state laws for coal mines that we currently own, lease or operate or that we or our predecessors have previously owned, leased or operated, and sites to which we or our predecessors sent hazardous substances.
We may be subject to liability under CERCLA and similar state laws for coal mines that we currently own, lease or operate or that we or our predecessors have previously owned, leased or operated, and sites to which we or our predecessors sent hazardous substances. These liabilities could be significant and materially and adversely impact our financial results and liquidity.
The EPA has established emission standards for mercury and other metal, fine particulates, and acid gases from coal- and oil-fired power plants through the Mercury and Air Toxics Standards (“MATS”) rule. Like CSAPR, MATS and other similar future regulations could 15 Table of Contents accelerate the retirement of a significant number of coal-fired power plants.
The EPA has established emission standards for mercury and other metals, fine particulates, and acid gases from coal- and oil-fired power plants through the Mercury and Air Toxics Standards (“MATS”) rule. Like CSAPR, MATS and other similar future regulations could accelerate the retirement of a significant number of coal-fired power plants. Such retirements would likely adversely impact our business.
The names of the seams in which we have coal reserves, and attributes thereof, are widely recognized in the metallurgical coal market. Trademarks related to CORE, the Company’s potentially new business line, could become material depending on future developments.
The names of the seams in which we have coal reserves, and attributes thereof, are widely recognized in the metallurgical coal market. However, trademarks related to our advanced carbon products business could become material depending on future developments.
These requirements, as well as any future changes in the management of coal combustion residuals, could increase our customers’ operating costs and potentially reduce their ability or need to purchase coal.
The finalization of this proposal, the current requirements of the CCR rules, as well as any future changes in the management of CCR, could increase our customers’ operating costs and potentially reduce their ability or need to purchase coal.
Item 1. Business Ramaco Resources, Inc. is a Delaware corporation formed in October 2016. Our common stock is listed on the NASDAQ Global Select Market under the symbol “METC”. Our 9.00% Senior Notes due 2026 (the “Senior Notes”) are listed on the NASDAQ Global Select Market under the symbol “METCL”. Our principal corporate offices are located in Lexington, Kentucky.
Item 1. Business Ramaco Resources, Inc. is a Delaware corporation formed in October 2016. Our Class A and Class B common stock are listed on the NASDAQ Global Select Market under the symbols “METC” and “METCB,” respectively. Our 9.00% Senior Notes due 2026 (the “Senior Notes”) are listed on the NASDAQ Global Select Market under the symbol “METCL”.
Brook Mine The property is located in northeastern Wyoming, near Sheridan, and consists of approximately 16,000 acres of controlled mineral rights and a research and development facility that were acquired as part of the purchase of Ramaco Coal in the second quarter of 2022.
Brook Mine The property is located in northeastern Wyoming, near Sheridan, and consists of approximately 16,000 acres of controlled mineral rights and a research and development facility that were acquired as part of the purchase of Ramaco Coal during 2022. The property includes a thermal coal deposit and permit as well as occurrences of rare earth elements.
The Elk Creek property consists of approximately 20,200 acres of controlled mineral rights and contains 4 Table of Contents approximately 16 seams that we have targeted for production. The Company commenced expansion of the Elk Creek preparation plant during 2022 to increase production in future periods. Development of our Berwind mining complex (the “Berwind Complex”) began in late-2017.
The Elk Creek property consists of approximately 20,200 acres of controlled mineral rights and contains approximately 16 seams that we have targeted for production. Expansion of the Elk Creek preparation plant occurred during 2022 and 2023 in order to increase production. Development of the Berwind Complex began in late 2017.
In May 2017, the EPA further limited summertime (May-September) nitrogen oxide emissions from power plants in 22 states in the eastern United States in the CSAPR Update Rule.
In September 2016, the EPA finalized a rule that further limited summertime (May-September) nitrogen oxide emissions from power plants in 22 states in the eastern United States beginning in May 2017 (the “CSAPR Update Rule”).
Metallurgical coal contracts in North America are typically 12-month, calendar year contracts where both prices and volumes are fixed. These contracts are normally negotiated and settled during the third and fourth quarters of the preceding calendar year.
Metallurgical coal is transported to domestic customers by truck, rail, barge and vessel. Metallurgical coal contracts in North America are typically 12-month, calendar year contracts where both prices and volumes are fixed. These contracts are normally negotiated and entered into during the third and fourth quarters of the preceding calendar year.
We estimate that the mine life for the Elk Creek Complex is over 20 years. We currently market most of the coal produced from the Elk Creek Complex as a blended high-volatile A/B product. When segregated, a portion of our coal can be sold as a high-volatile A product for a premium.
We currently market most of the coal produced from the Elk Creek Complex as a blended high-volatile A/B product. When segregated, a portion of our coal can be sold as a high-volatile A product for a premium. Our market for Elk Creek production is principally North American coke and steel producers.
For example, in August 2015, the EPA finalized the 16 Table of Contents Clean Power Plan (the “CPP”) to cut carbon emissions from existing power plants, which did not formally go into effect because the Supreme Court stayed its implementation in February 2016.
For example, in August 2015, the EPA finalized the Clean Power Plan (the “CPP”) to cut carbon emissions from existing power plants, which did not formally go into effect because the U.S. Supreme Court stayed its implementation in February 2016. In July 2019, the EPA adopted the Affordable Clean Energy Rule (the “ACE Rule”) that repealed and replaced the CPP.
States with non-attainment areas must adopt a state implementation plan that demonstrates compliance with the existing or new air quality standards. These plans could require significant additional emissions control expenditures at coal-fired power plants. New rules and standards may also impose additional emissions control requirements on our customers in the electric generation, steelmaking, and coke industries.
These plans could require significant additional emissions control expenditures at coal-fired power plants. New rules and standards may also impose additional emissions control requirements on our customers in the electric generation, steelmaking, and coke industries.
From time to time, we process coal purchased from other independent producers at the Knox Creek preparation plant and load-out facilities. We may also process and load coal from our Berwind Complex at this facility until such time that the Berwind plant is fully up and running.
We estimate that the mine life for the Knox Creek Complex is approximately 15 years. From time to time, we process coal purchased from other independent producers at the Knox Creek preparation plant and load-out facilities. We have also processed and loaded coal from our Berwind Complex at this facility.
In July 2019, the EPA adopted the Affordable Clean Energy Rule (the “ACE Rule”) that repealed and replaced the CPP. The ACE Rule required states to set appropriate GHG emission standards for power plants within their jurisdiction based upon the application of “candidate” heat rate improvement measures. The D.C. Circuit repealed the ACE Rule in January 2021.
The ACE Rule required states to set appropriate GHG emission standards for power plants within their jurisdiction based upon the application of “candidate” heat rate improvement measures. In January 2021, the D.C. Circuit vacated the ACE Rule and remanded it to the agency for further proceedings.
The McDonald reserves have the same geologic advantages and low costs that are being experienced in our Elk Creek mines. During 2022, we began work on a throughput upgrade at our Elk Creek Preparation plant.
The McDonald reserves have the same geologic advantages and low costs that are being experienced in our Elk Creek mines. During 2022, we began work on a throughput upgrade at our Elk Creek Preparation plant. The upgrade, which was completed in 2023, increased our annual processing capacity for this complex to approximately three million tons per year.
Customers and Contracts Coal prices differ substantially by region and are impacted by many factors including the overall economy, demand for steel, demand for electricity, location, market, quality and type of coal, mine operation costs and the cost of customer alternatives. The major factors influencing our business are the global economy and demand for steel.
Work is ongoing to evaluate the potential exploitation of these minerals within the current Brook Mine permit area. Customers and Contracts Coal prices differ substantially by region and are impacted by many factors including the overall economy, demand for steel, demand for electricity, location, market, quality and type of coal, mine operation costs and the cost of customer alternatives.
This leased property became available after the former base lease with another party was terminated. The prior lessee, who controlled the property since 1978, did not produce commercial amounts of coal from the property during their possession of the lease.
The prior lessee, who controlled the property since 1978, did not produce commercial amounts of coal from the property during their possession of the lease.
Additionally, recent court decisions, regulatory actions and proposed legislation have created uncertainty over CWA jurisdiction and permitting requirements, such as an April 2020 decision further defining the scope of the CWA, wherein the U.S. Supreme Court held that, in certain cases, discharges from a point source to groundwater could fall within the scope of the CWA and require a permit.
Additionally, recent court decisions, regulatory actions and proposed legislation have created uncertainty over CWA jurisdiction and permitting requirements, such as (1) an April 2020 decision further defining the scope of the CWA, wherein the U.S.
Initial production is expected to begin in the second quarter of 2023, reaching an annualized production rate of approximately 250,000 tons of low-volatile coal. The Company will consider deep mine development of coal contained in Pocahontas 3 and 4 seams at a future point.
The Company expects that coal contained in the Sewell seam will be mined by surface and high-wall mining methods. Initial production began in 2023, reaching an annualized production rate of approximately 250,000 tons of low-volatile coal. The Company will consider deep mine development of coal contained in Beckley, Pocahontas 3, 4, and 6 seams at a future point.
It is anticipated that Phase II of the proposed rulemaking will propose further revisions to ensure the NEPA process “provides for efficient and effective environmental reviews,” and meets environmental, environmental justice, and climate change objectives.
Phase II of the proposed rulemaking was published by CEQ in July 2023. Phase II proposes further revisions in an attempt to ensure the NEPA process “provides for efficient and effective environmental reviews,” and meets environmental, environmental justice, and climate change objectives.
United States metallurgical coal mines are primarily located in the Appalachian area of the eastern U.S. Imported metallurgical coal has historically been uneconomic due to transportation costs and availability of domestic supply. Metallurgical coal is transported to domestic customers by truck, rail, barge and vessel.
The metallurgical coal global market has grown steadily in recent years and is expected to continue to do so over the next few years. United States metallurgical coal mines are primarily located in the Appalachian area of the eastern U.S. Imported metallurgical coal has historically been uneconomic due to transportation costs and availability of domestic supply.

… 72 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

70 edited+82 added−11 removed292 unchanged
Biggest changeIf the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated. ​ Risks Related to Our Company ● Our ability to pay dividends may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions in any future debt instruments and by additional factors unrelated to our profitability. ● Your percentage of ownership in us may be diluted in the future. ● Certain of our directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities. 23 Table of Contents ​ Risks Related to Our Business Our properties have not yet been fully developed into producing coal mines and, if we experience any development delays or cost increases or are unable to complete the construction of our facilities, our business, financial condition and results of operations could be adversely affected.
Biggest changeIf the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated. ​ Risks Related to Our Company ● Our ability to pay dividends may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions of any future debt instruments and by additional factors unrelated to our profitability. ● Your percentage of ownership in us may be diluted in the future. ● Certain of our directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities. ​ Risks Related to Our Class B Common Stock Structure 23 Table of Contents ​ ● Holders of Class B common stock are common stockholders of the Company and, therefore, are subject to risks associated with an investment in the Company as a whole, even if the holder does not own shares of Class A common stock. ● Our Board’s ability to reattribute businesses, assets, and expenses between the Class A common stock and Class B common stock may make it difficult to assess the future prospects of a class of common stock based on past performance. ● Dividends on our Class B common stock are discretionary and may fluctuate materially quarter to quarter.
The occurrence of an event that is not fully covered by insurance could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ In addition, if any of the foregoing changes, conditions or events occurs and is not determined to be a force majeure event, any resulting failure on our part to deliver coal to the purchaser under contract could result in economic penalties, suspension or cancellation of shipments or ultimately termination of the agreement, any of which could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ 30 Table of Contents Our operations are located in a single geographic region, making us vulnerable to risks associated with operating in a single geographic area, including adverse impacts of weaker conditions associated with climate change.
The 30 Table of Contents occurrence of an event that is not fully covered by insurance could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ In addition, if any of the foregoing changes, conditions or events occurs and is not determined to be a force majeure event, any resulting failure on our part to deliver coal to the purchaser under contract could result in economic penalties, suspension or cancellation of shipments or ultimately termination of the agreement, any of which could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ Our operations are located in a single geographic region, making us vulnerable to risks associated with operating in a single geographic area, including adverse impacts of weaker conditions associated with climate change.
The amount of cash we generate from operations and the actual amount of cash we will have available for dividends will vary based upon, among other things: ​ ● risks related to the impact of the COVID-19 global pandemic, such as the scope and duration of the outbreak, the health and safety of our employees, government actions and restrictive measures implemented in response, delays and cancellations of customer sales, supply chain disruptions and other impacts to the business, or our ability to execute our business continuity plans; ● the development of our properties into producing coal mines; ● the ability to begin generating significant revenues and operating cash flows; ● the market price for coal; ● overall domestic and global economic conditions, including the supply of and demand for domestic and foreign coal, coke and steel; ● unexpected operational events or geological conditions; 45 Table of Contents ● cost overruns; ● our ability to enter into agreements governing the sale of coal, which are generally short-term in nature and subject to fluctuations in market pricing; ● the level of our operating costs; ● prevailing global and regional economic and political conditions; ● changes in interest rates; ● the impact of domestic and foreign governmental laws and regulations, including environmental and climate change regulations and regulations affecting the coal mining industry; ● delays in the receipt of, failure to receive, failure to maintain or revocation of necessary governmental permits; ● modification or revocation of our dividend policy by our board of directors; and ● the amount of any cash reserves established by our board of directors. ​ The amount of cash we generate from our operations may differ materially from our net income or loss for the period, which will be affected by non-cash items.
The amount of cash we generate from operations and the actual amount of cash we will have available for dividends will vary based upon, among other things: ​ ● risks related to the impact of the COVID-19 global pandemic, such as the scope and duration of the outbreak, the health and safety of our employees, government actions and restrictive measures 45 Table of Contents implemented in response, delays and cancellations of customer sales, supply chain disruptions and other impacts to the business, or our ability to execute our business continuity plans; ● the development of our properties into producing coal mines; ● the ability to begin generating significant revenues and operating cash flows; ● the market price for coal; ● overall domestic and global economic conditions, including the supply of and demand for domestic and foreign coal, coke and steel; ● unexpected operational events or geological conditions; ● cost overruns; ● our ability to enter into agreements governing the sale of coal, which are generally short-term in nature and subject to fluctuations in market pricing; ● the level of our operating costs; ● prevailing global and regional economic and political conditions; ● changes in interest rates; ● the impact of domestic and foreign governmental laws and regulations, including environmental and climate change regulations and regulations affecting the coal mining industry; ● delays in the receipt of, failure to receive, failure to maintain or revocation of necessary governmental permits; ● modification or revocation of our dividend policy by our board of directors; and ● the amount of any cash reserves established by our board of directors. ​ The amount of cash we generate from our operations may differ materially from our net income or loss for the period, which will be affected by non-cash items.
In addition, some provisions of our Charter and bylaws could make it more difficult for a third-party to acquire control of us, even if the change of control would be beneficial to our stockholders, including: ​ ● limitations on the removal of directors; ● limitations on the ability of our stockholders to call special meetings; ● establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders; ● providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and ● establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings. ​ 47 Table of Contents Our Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
In addition, some provisions of our Charter and bylaws could make it more difficult for a third-party to acquire control of us, even if the change of control would be beneficial to our stockholders, including: ​ ​ 47 Table of Contents ● limitations on the removal of directors; ● limitations on the ability of our stockholders to call special meetings; ● establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders; ● providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and ● establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings. ​ Our Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
A summary of our risk factors is as follows: Risks Related to Our Business ● Our properties have not yet been fully developed into producing coal mines and, if we experience any development delays or cost increases or are unable to complete the construction of our facilities, our business, financial condition and results of operations could be adversely affected. ● We have customer concentration, so the loss of, or significant reduction in, purchases by our largest coal customers could adversely affect our business, financial condition, results of operations and cash flows. ● Our customer base is highly dependent on the steel industry. ● Deterioration in the global economic conditions, a worldwide financial downturn or negative credit market conditions could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends. ● Our operations may be disrupted, and its financial results may be adversely affected, by global outbreaks of contagious diseases, including COVID-19. ● We do not enter into long-term sales contracts for our coal and as a result we are exposed to fluctuations in market pricing. ● We face uncertainties in estimating our economically recoverable coal reserves, and inaccuracies in our estimates could result in lower than expected revenues, higher than expected costs and decreased profitability. ● A substantial or extended decline in the prices we receive for our coal could adversely affect our business, results of operations, financial condition, cash flows and ability to pay dividends to our stockholders. ● Changes in the global economic environment, inflation, rising interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict, could have an adverse effect on our industry and business, as well as those of our customers and suppliers. ● Increased competition or a loss of our competitive position could adversely affect sales of, or prices for, our coal, which could impair our profitability. 22 Table of Contents ● The availability and reliability of transportation facilities and fluctuations in transportation costs could affect the demand for our coal or impair our ability to supply coal to prospective customers. ● Any significant downtime of our major pieces of mining equipment, including any preparation plants, could impair our ability to supply coal to prospective customers and materially and adversely affect our results of operations. ● Our ability to collect payments from customers could be impaired if their creditworthiness declines or if they fail to honor their contracts with us. ● If we are unable to obtain needed capital or financing on satisfactory terms, we may have to curtail our operations and delay our construction and growth plans, which may materially adversely affect our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ● Our operations could be adversely affected if we are unable to obtain required financial assurance, or if the costs of financial assurance increase materially. ● Defects in title or loss of any leasehold interests in our properties could limit our ability to conduct mining operations on these properties or result in significant unanticipated costs. ● Substantially all of our mining properties are leased from our affiliates and conflicts of interest may arise in the future as a result. ● We may face restricted access to international markets in the future. ● Our lessees could satisfy obligations to their customers with minerals from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments. ● Technology development involves significant time and expense and can be uncertain. ​ Risks Related to Environmental, Health, Safety and Other Regulations ● The current U.S. administration and Congress could enact legislative and regulatory measures that could adversely affect our mining operations or cost structure or our customers’ ability to use coal, which could have a material adverse effect on our financial condition and results of operations. ● Current and future government laws, regulations and other legal requirements relating to protection of the environment and natural resources may increase our costs of doing business and may restrict our coal operations. ● Our operations may impact the environment or cause exposure to hazardous substances, and our properties may have environmental contamination, which could expose us to significant costs and liabilities. ● We must obtain, maintain, and renew governmental permits and approvals for mining operations, which can be a costly and time-consuming process and result in restrictions on our operations. ● We and our significant stockholders are subject to the Applicant Violator System. ● Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation.
A summary of our risk factors is as follows: Risks Related to Our Business ● Our properties have not yet been fully developed into producing coal mines and, if we experience any development delays or cost increases or are unable to complete the construction of our facilities, our business, financial condition and results of operations could be adversely affected. ● We have customer concentration, so the loss of, or significant reduction in, purchases by our largest coal customers could adversely affect our business, financial condition, results of operations and cash flows. ● Our customer base is highly dependent on the steel industry. ● Deterioration in the global economic conditions, a worldwide financial downturn or negative credit market conditions could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends. ● Our operations may be disrupted, and our financial results may be adversely affected, by global outbreaks of contagious diseases, including COVID-19. ● We do not enter into long-term sales contracts for our coal and as a result we are exposed to fluctuations in market pricing. ● We face uncertainties in estimating our economically recoverable coal reserves, and inaccuracies in our estimates could result in lower-than-expected revenues, higher than expected costs and decreased profitability. ● A substantial or extended decline in the prices we receive for our coal could adversely affect our business, results of operations, financial condition, cash flows and ability to pay dividends to our stockholders. ● Changes in the global economic environment, inflation, rising interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict, could have an adverse effect on our industry and business, as well as those of our customers and suppliers. ● Increased competition or a loss of our competitive position could adversely affect sales of, or prices for, our coal, which could impair our profitability. ● The availability and reliability of transportation facilities and fluctuations in transportation costs could affect the demand for our coal or impair our ability to supply coal to prospective customers. 22 Table of Contents ● Any significant downtime of our major pieces of mining equipment, including any preparation plants, could impair our ability to supply coal to prospective customers and materially and adversely affect our results of operations. ● Our ability to collect payments from customers could be impaired if their creditworthiness declines or if they fail to honor their contracts with us. ● If we are unable to obtain needed capital or financing on satisfactory terms, we may have to curtail our operations and delay our construction and growth plans, which may materially adversely affect our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ● Our operations could be adversely affected if we are unable to obtain required financial assurance, or if the costs of financial assurance increase materially. ● Defects in title or loss of any leasehold interests in our properties could limit our ability to conduct mining operations on these properties or result in significant unanticipated costs. ● Substantially all of our mining properties are leased from our affiliates and conflicts of interest may arise in the future as a result. ● We may face restricted access to international markets in the future. ● Our lessees could satisfy obligations to their customers with minerals from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments. ● Technology development involves significant time and expense and can be uncertain. ​ Risks Related to Environmental, Health, Safety and Other Regulations ● The current U.S. administration and Congress could enact legislative and regulatory measures that could adversely affect our mining operations or cost structure or our customers’ ability to use coal, which could have a material adverse effect on our financial condition and results of operations. ● Current and future government laws, regulations and other legal requirements relating to protection of the environment and natural resources may increase our costs of doing business and may restrict our coal operations. ● Our operations may impact the environment or cause exposure to hazardous substances, and our properties may have environmental contamination, which could expose us to significant costs and liabilities. ● We must obtain, maintain, and renew governmental permits and approvals for mining operations, which can be a costly and time-consuming process and result in restrictions on our operations. ● We and our significant stockholders are subject to the Applicant Violator System. ● Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation.
The indenture governing our Senior Notes and the agreements governing our other indebtedness, including the Credit Agreement, and surety bonding obligations contain certain restrictions and covenants which restrict our ability to incur liens and/or debt or provide guarantees in respect of obligations of any other person and other restrictions, all of which could adversely affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations. ​ These covenants limit, among other things, our ability to: ​ ● incur additional indebtedness; ● pay dividends on or make distributions in respect of stock or make certain other restricted payments, such as share repurchases; ● make capital investments; ● enter into agreements that restrict distributions from certain subsidiaries; ● sell or otherwise dispose of assets; ● use for general purposes the cash received from certain allowable asset sales or disposals; 49 Table of Contents ● enter into transactions with affiliates; ● create or incur liens; ● merge, consolidate or sell all or substantially all of our assets; and ● receive dividends or other payments from subsidiaries in certain cases. ​ Our ability to comply with these covenants may be affected by events beyond our control and we may need to refinance existing debt in the future.
The indenture governing our Senior Notes and the agreements governing our other indebtedness, including the Credit Agreement, and surety bonding obligations contain certain restrictions and covenants which restrict our ability to incur liens and/or debt or provide guarantees in respect of obligations of any other person and other restrictions, all of which could adversely affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations. ​ These covenants limit, among other things, our ability to: ​ ● incur additional indebtedness; ● pay dividends on or make distributions in respect of stock or make certain other restricted payments, such as share repurchases; ● make capital investments; ● enter into agreements that restrict distributions from certain subsidiaries; ● sell or otherwise dispose of assets; ● use for general purposes the cash received from certain allowable asset sales or disposals; 55 Table of Contents ● enter into transactions with affiliates; ● create or incur liens; ● merge, consolidate or sell all or substantially all of our assets; and ● receive dividends or other payments from subsidiaries in certain cases. ​ Our ability to comply with these covenants may be affected by events beyond our control and we may need to refinance existing debt in the future.
Renewed or continued weakness in the economic conditions of any of the industries served by prospective customers could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ Our operations may be disrupted, and its financial results may be adversely affected, by global outbreaks of contagious diseases, including COVID-19.
Renewed or continued weakness in the economic conditions of any of the industries served by prospective customers could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ Our operations may be disrupted, and our financial results may be adversely affected, by global outbreaks of contagious diseases, including COVID-19.
A prolonged downturn in the financial markets could have an adverse effect on our business, results of operations and ability to raise capital. ​ We cannot predict the full impact that global outbreaks of contagious diseases, including COVID-19, will have on our business, cash flows, liquidity, financial condition and results of operations at this time, due to numerous uncertainties.
A prolonged downturn in the financial markets could have an adverse effect on our business, results of operations and ability to raise capital. ​ We cannot predict the full impact that future global outbreaks of contagious diseases, including COVID-19, will have on our business, cash flows, liquidity, financial condition and results of operations at this time, due to numerous uncertainties.
These efforts may have adverse consequences, including, but not limited to: ​ ● restricting our ability to access capital and financial markets in the future; ● reducing the demand and price for our equity securities; ● increasing the cost of borrowing; ● causing a decline in our credit ratings; ● reducing the availability, and/or increasing the cost of, third-party insurance; ● increasing our retention of risk through self-insurance; ● making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing; and ● limiting our flexibility in business development activities such as mergers, acquisitions and divestitures. 50 Table of Contents If securities or industry analysts adversely change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline.
These efforts may have adverse consequences, including, but not limited to: ​ ● restricting our ability to access capital and financial markets in the future; ● reducing the demand and price for our equity securities; ● increasing the cost of borrowing; ● causing a decline in our credit ratings; ● reducing the availability, and/or increasing the cost of, third-party insurance; ● increasing our retention of risk through self-insurance; ● making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing; and ● limiting our flexibility in business development activities such as mergers, acquisitions and divestitures. 56 Table of Contents If securities or industry analysts adversely change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline.
We may incur other expenses or liabilities that could reduce or eliminate the cash available for distribution as dividends. ​ In addition, financing agreements may prohibit the payment of dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends. ​ In addition, Section 170 of the Delaware General Corporation Law (the “DGCL”) allows our board of directors to declare and pay dividends on the shares of our common stock either (i) out of our surplus, as defined in and computed in accordance with the DGCL or (ii) in case there shall be no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
We may incur other expenses or liabilities that could reduce or eliminate the cash available for distribution as dividends. ​ In addition, financing agreements may prohibit the payment of dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends. ​ In addition, Section 170 of the Delaware General Corporation Law (the “DGCL”) allows our board of directors to declare and pay dividends on the shares of our Class A common stock and Class B common stock either (i) out of our surplus, as defined in and computed in accordance with the DGCL or (ii) in case there shall be no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
These additional awards will have a dilutive effect on the Company’s earnings per share, which could adversely affect the market price of the Company’s common stock. ​ In addition, our Charter authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock with respect to dividends and distributions, as our board of directors generally may determine.
These additional awards will have a dilutive effect on the Company’s earnings per share, which could adversely affect the market price of the Company’s Class A common stock and Class B common stock. ​ In addition, our Charter authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock with respect to dividends and distributions, as our board of directors generally may determine.
These requirements include: ​ ● the provisions of Section 404 requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting; ​ ● the requirement to provide detailed compensation discussion and analysis in proxy statements and reports filed under the Exchange Act; and ​ ● the “say on pay” provisions (requiring a non-binding stockholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding stockholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act. ​ We have already incurred significant additional legal and financial compliance costs in connection with our loss of emerging growth company status.
These requirements include: ​ ● the provisions of Section 404 requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting; ​ ● the requirement to provide detailed compensation discussion and analysis in proxy statements and reports filed under the Exchange Act; and ​ ● the “say on pay” provisions (requiring a non-binding stockholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding stockholder vote 46 Table of Contents to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act. ​ We have already incurred significant additional legal and financial compliance costs in connection with our loss of emerging growth company status.
In addition, new laws and regulations governing data privacy and the unauthorized disclosure of confidential information pose increasingly 51 Table of Contents complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations (or contractual provisions requiring similar compliance) could result in significant penalties and legal liability, require us to change our business practices, increase the costs and complexity of compliance, and adversely affect our business.
In addition, new laws and regulations governing data privacy and the unauthorized disclosure of confidential information pose increasingly 57 Table of Contents complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations (or contractual provisions requiring similar compliance) could result in significant penalties and legal liability, require us to change our business practices, increase the costs and complexity of compliance, and adversely affect our business.
While it could remain possible to obtain permits for underground mining operations in these areas even where this 100-foot restriction was applied, the time and expense 36 Table of Contents of that permitting process would be likely to increase significantly, and the restrictions placed on the mining of those properties could adversely affect our costs. ​ Our lessees could satisfy obligations to their customers with minerals from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments. ​ Mineral supply contracts generally do not require operators to satisfy their obligations to their customers with resources mined from specific locations.
While it could remain possible to obtain permits for underground mining operations in these areas even where this 100-foot restriction was applied, the time and expense of that permitting process would be likely to increase significantly, and the restrictions placed on the mining of those properties could adversely affect our costs. ​ Our lessees could satisfy obligations to their customers with minerals from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments. ​ Mineral supply contracts generally do not require operators to satisfy their obligations to their customers with resources mined from specific locations.
Any reductions in the amount of coal consumed by electric power generators as a result of current or new standards for the emission of impurities, or current or new incentives to switch to renewable fuels or renewable energy sources could reduce the demand for our coal, thereby reducing our revenues and adversely affecting our business, cash flows, results of operations and our ability to pay dividends to our stockholders. ​ Negative sentiment with regard to our business or our industry as well as activism, consumer preferences, and initiatives aimed at limiting climate change or a reduction of air pollutants could interfere with our business activities, operations and ability to access capital sources, result in reduced demand for our products, and negatively impact our stock price.
Any reductions in the amount of coal consumed by electric power generators as a result of current or new standards for the emission of impurities, or current or new 42 Table of Contents incentives to switch to renewable fuels or renewable energy sources could reduce the demand for our coal, thereby reducing our revenues and adversely affecting our business, cash flows, results of operations and our ability to pay dividends to our stockholders. ​ Negative sentiment with regard to our business or our industry as well as activism, consumer preferences, and initiatives aimed at limiting climate change or a reduction of air pollutants could interfere with our business activities, operations and ability to access capital sources, result in reduced demand for our products, and negatively impact our stock price.
Timely and cost-effective completion of the development of our properties, including necessary facilities and infrastructure, in compliance with agreed specifications is central to our business strategy and is highly dependent on the performance of our contractors under the agreements with them. ​ Although some agreements may provide for liquidated damages, if the contractor fails to perform in the manner required with respect to certain of its obligations, the events that trigger a requirement to pay liquidated damages may delay or impair the operation of our properties, and any liquidated damages that we receive may not be sufficient to cover the damages that we suffer as a result of any such delay or impairment.
Timely and cost-effective completion of the development of our properties, including necessary facilities and infrastructure, in compliance with agreed specifications is central to our business strategy and is highly dependent on the performance of our contractors under the agreements with them. ​ 27 Table of Contents Although some agreements may provide for liquidated damages, if the contractor fails to perform in the manner required with respect to certain of its obligations, the events that trigger a requirement to pay liquidated damages may delay or impair the operation of our properties, and any liquidated damages that we receive may not be sufficient to cover the damages that we suffer as a result of any such delay or impairment.
Such issuances may have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock. ​ It is anticipated that the compensation committee of the board of directors of the Company will grant additional equity awards to Company employees and directors, from time to time, under the Company’s compensation and employee benefit plans.
Such issuances may have a dilutive effect on our earnings per share, which could adversely affect the market price of our Class A common stock and Class B common stock. ​ It is anticipated that the compensation committee of the board of directors of the Company will grant additional equity awards to Company employees and directors, from time to time, under the Company’s compensation and employee benefit plans.
If any customers were to significantly reduce their purchases of coal from us, including by failing to buy and pay for coal they committed to purchase in sales contracts, our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders could be adversely affected. ​ See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 2—Summary of Significant Accounting Policies—Concentrations” for additional information. ​ Our customer base is highly dependent on the steel industry.
If any customers were to significantly reduce their purchases of coal from us, including by failing to buy and pay for coal they committed to purchase in sales contracts, our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders could be adversely affected. ​ See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 2—Summary of Significant Accounting Policies—Concentrations” for additional information. ​ 24 Table of Contents Our customer base is highly dependent on the steel industry.
Such changes could cause delays if manufacturers and suppliers are unable to make the required changes in compliance with mandated deadlines. ​ If either our preparation plants, or train loadout facilities, or those of a third party processing or loading our coal, suffer extended downtime, including from major damage, or is destroyed, our ability to process and deliver coal to prospective customers would be materially impacted, which would materially adversely affect our business, results of operations, financial condition, cash flows and ability to pay dividends to our stockholders.
Such changes could 31 Table of Contents cause delays if manufacturers and suppliers are unable to make the required changes in compliance with mandated deadlines. ​ If either our preparation plants, or train loadout facilities, or those of a third party processing or loading our coal, suffer extended downtime, including from major damage, or is destroyed, our ability to process and deliver coal to prospective customers would be materially impacted, which would materially adversely affect our business, results of operations, financial condition, cash flows and ability to pay dividends to our stockholders.
While conventional blast furnace technology has been the most economic large-scale steel production technology for a number of years, and emergent technologies typically take many years to commercialize, there can be no assurance that over the longer term competitive technologies not reliant on metallurgical coal would not emerge, which could reduce the demand and price premiums for metallurgical coal. ​ Moreover, we may produce and market other coal products, such as thermal coal, which are also subject to alternative competition.
While conventional blast furnace technology has been the most economic large-scale steel production technology for a number of years, and emergent technologies typically take many years to commercialize, there can be no assurance that over the longer term 26 Table of Contents competitive technologies not reliant on metallurgical coal would not emerge, which could reduce the demand and price premiums for metallurgical coal. ​ Moreover, we may produce and market other coal products, such as thermal coal, which are also subject to alternative competition.
Actions taken by the U.S. government could affect our results of operations, cash flows and liquidity. ​ 28 Table of Contents The ongoing war in Ukraine has had a broad range of adverse impacts on global economic conditions, some of which have had and are likely to continue to have adverse impacts on our business, including increased raw material and energy costs, softer customer demand and lower steel prices. ​ Additionally, we are also exposed to risks associated with the business success and creditworthiness of our suppliers and customers.
Actions taken by the U.S. government could affect our results of operations, cash flows and liquidity. ​ The ongoing war in Ukraine has had a broad range of adverse impacts on global economic conditions, some of which have had and are likely to continue to have adverse impacts on our business, including increased raw material and energy costs, softer customer demand and lower steel prices. ​ Additionally, we are also exposed to risks associated with the business success and creditworthiness of our suppliers and customers.
In January 2022, the EPA announced several actions with respect to the coal combustion residuals rules, including reiterating that 38 Table of Contents surface impoundments cannot be closed with coal ash in contact with groundwater (in connection with the proposed denial of closure deadline extensions due to failure of a permittee to demonstrate compliance with coal combustion residuals rules – the EPA took final action to deny the request in November 2022) and establishing a federal permitting scheme for the disposal of coal ash and establish regulations for legacy coal ash surface impoundments.
In January 2022, the EPA announced several actions with respect to the coal combustion residuals rules, including reiterating that surface impoundments cannot be closed with coal ash in contact with groundwater (in connection with the proposed denial of closure deadline extensions due to failure of a permittee to demonstrate compliance with coal combustion residuals rules – the EPA took final action to deny the request in November 2022) and establishing a federal permitting scheme for the disposal of coal ash and establish regulations for legacy coal ash surface impoundments.
This would likely result in significant project delays and increased costs, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. 27 Table of Contents ​ Prices for coal are volatile and can fluctuate widely based upon a number of factors beyond our control, including oversupply relative to the demand available for our coal and weather.
This would likely result in significant project delays and increased costs, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ Prices for coal are volatile and can fluctuate widely based upon a number of factors beyond our control, including oversupply relative to the demand available for our coal and weather.
Retaliatory threats by foreign nations to these tariffs may limit international trade and adversely impact global economic conditions. ​ 24 Table of Contents Deterioration in the global economic conditions in any of the industries in which prospective customers operate, a worldwide financial downturn or negative credit market conditions could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
Retaliatory threats by foreign nations to these tariffs may limit international trade and adversely impact global economic conditions. ​ Deterioration in the global economic conditions in any of the industries in which prospective customers operate, a worldwide financial downturn or negative credit market conditions could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
Periods of economic downturn or continued uncertainty could result in difficulty increasing or maintaining our level of sales or profitability and we may experience an adverse effect on our business, results of operations, financial condition and cash flows. ​ Our operations are subject to economic conditions, including credit and capital market conditions, inflation, prevailing interest rates, and political factors, which if changed could negatively affect our results of operations, cash flows and liquidity.
Periods of economic downturn or continued uncertainty could result in difficulty increasing or maintaining our level of sales or 28 Table of Contents profitability and we may experience an adverse effect on our business, results of operations, financial condition and cash flows. ​ Our operations are subject to economic conditions, including credit and capital market conditions, inflation, prevailing interest rates, and political factors, which if changed could negatively affect our results of operations, cash flows and liquidity.
See “Business—Environmental and Other Regulatory Matters—Clean Water Act.” ​ Further, the public has certain statutory rights to comment on and submit objections to requested permits and environmental impact statements prepared in connection with applicable regulatory processes, and otherwise engage in the permitting process, including bringing citizens’ claims to challenge the issuance or renewal of permits, the validity of environmental impact statements or performance of mining activities.
See “Business—Environmental and Other Regulatory Matters—Clean Water Act.” ​ Further, the public has certain statutory rights to comment on and submit objections to requested permits and environmental impact statements prepared in connection with applicable regulatory processes, and otherwise engage in 41 Table of Contents the permitting process, including bringing citizens’ claims to challenge the issuance or renewal of permits, the validity of environmental impact statements or performance of mining activities.
Our inability to collect payment from counterparties to our sales contracts may materially adversely affect our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. ​ We may be unsuccessful in integrating the operations of any future acquisitions, including acquisitions involving new lines of business, with our existing operations, and in realizing all or any part of the anticipated benefits of any such acquisitions.
Our inability to collect payment from counterparties to our sales contracts may materially adversely affect our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders. 32 Table of Contents ​ We may be unsuccessful in integrating the operations of any future acquisitions, including acquisitions involving new lines of business, with our existing operations, and in realizing all or any part of the anticipated benefits of any such acquisitions.
Any reduction in the amount of coal consumed by electric power generators as a result of actual or potential regulation of GHG emissions, including any reductions resulting from power plants ceasing operations or switching to fuels that produce fewer GHG emissions, could decrease demand for our coal, thereby reducing our revenues and materially and adversely affecting our business and results of operations.
Any reduction in the amount of coal consumed by electric power generators as a result of actual or potential regulation of GHG emissions, including any reductions resulting from power plants ceasing operations or switching to fuels that produce fewer GHG 39 Table of Contents emissions, could decrease demand for our coal, thereby reducing our revenues and materially and adversely affecting our business and results of operations.
Depending on priority of interests, our operations may have to avoid existing oil and gas wells or expend sums to plug oil and gas wells. 34 Table of Contents ​ If a well is in the path of our mining for coal on land that has not yet been permitted for our mining activities, we may not be able to mine through the well unless we purchase it.
Depending on priority of interests, our operations may have to avoid existing oil and gas wells or expend sums to plug oil and gas wells. ​ If a well is in the path of our mining for coal on land that has not yet been permitted for our mining activities, we may not be able to mine through the well unless we purchase it.
If a work stoppage were to occur, it could interfere with operations and have a material adverse effect on our business, financial condition, results of operations, cash flows and our ability to pay dividends to our stockholders. ​ 35 Table of Contents A shortage of skilled labor in the mining industry could pose a risk to achieving improved labor productivity, which could adversely affect our profitability.
If a work stoppage were to occur, it could interfere with operations and have a material adverse effect on our business, financial condition, results of operations, cash flows and our ability to pay dividends to our stockholders. ​ A shortage of skilled labor in the mining industry could pose a risk to achieving improved labor productivity, which could adversely affect our profitability.
Most recently, at the 27th conference of parties (“COP27”), President Biden announced the EPA’s proposed standards to reduce methane emissions from existing oil and gas sources, and agreed, in conjunction with the European Union and a number of other partner countries, to develop standards for monitoring and reporting methane emissions to help create a market for low methane-intensity natural gas.
Most recently, at the 27th conference of parties (“COP27”), 38 Table of Contents President Biden announced the EPA’s proposed standards to reduce methane emissions from existing oil and gas sources, and agreed, in conjunction with the European Union and a number of other partner countries, to develop standards for monitoring and reporting methane emissions to help create a market for low methane-intensity natural gas.
Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of our common stock. ​ Certain of our directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.
Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of our Class A common stock and Class B common stock. ​ Certain of our directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.
We may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies we use now or in the future were to become obsolete, our business, financial 39 Table of Contents condition or results of operations could be materially and adversely affected.
We may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies we use now or in the future were to become obsolete, our business, financial condition or results of operations could be materially and adversely affected.
If we cannot successfully negotiate for land access, we could be denied a permit to mine coal we already own. 41 Table of Contents ​ Federal or state regulatory agencies have the authority to order certain of our mines to be temporarily or permanently closed under certain circumstances, which could materially and adversely affect our ability to meet our customers’ demands.
If we cannot successfully negotiate for land access, we could be denied a permit to mine coal we already own. ​ Federal or state regulatory agencies have the authority to order certain of our mines to be temporarily or permanently closed under certain circumstances, which could materially and adversely affect our ability to meet our customers’ demands.
The expectation of future prices for coal depends upon many factors beyond our control, including the following: ​ ● the market price for coal; ● overall domestic and global economic conditions, including the supply of and demand for domestic and foreign coal, coke and steel; ● the consumption pattern of industrial consumers, electricity generators and residential users; ● weather conditions in our markets that affect the demand for thermal coal or that affect the ability to produce metallurgical coal; ● competition from other coal suppliers; ● technological advances affecting energy consumption; ● the costs, availability and capacity of transportation infrastructure; ● the impact of domestic and foreign governmental laws and regulations, including environmental and climate change regulations and regulations affecting the coal mining industry, and delays in the receipt of, failure to receive, failure to maintain or revocation of necessary governmental permits; and ● increased utilization by the steel industry of electric arc furnaces or pulverized coal injection processes, which reduce or eliminate the use of furnace coke, an intermediate product produced from metallurgical coal, and generally decrease the demand for metallurgical coal. ​ Metallurgical coal has been an extremely volatile commodity over the past 10 years.
The expectation of future prices for coal depends upon many factors beyond our control, including the following: ​ ● the market price for coal; ● overall domestic and global economic conditions, including the supply of and demand for domestic and foreign coal, coke and steel; ● the consumption pattern of industrial consumers, electricity generators and residential users; ● weather conditions in our markets that affect the demand for thermal coal or that affect the ability to produce metallurgical coal; ● competition from other coal suppliers; ● technological advances affecting energy consumption; ● the costs, availability and capacity of transportation infrastructure; ● the impact of domestic and foreign governmental laws and regulations, including environmental and climate change regulations and regulations affecting the coal mining industry, and delays in the receipt of, failure to receive, failure to maintain or revocation of necessary governmental permits; and ● increased utilization by the steel industry of electric arc furnaces or pulverized coal injection processes, which reduce or eliminate the use of furnace coke, an intermediate product produced from metallurgical coal, and generally decrease the demand for metallurgical coal. ​ Metallurgical coal is an extremely volatile commodity.
The net effect of these developments is to make it more costly and difficult to maintain our business and to continue to depress the market for coal. ​ 43 Table of Contents Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation.
The net effect of these developments is to make it more costly and difficult to maintain our business and to continue to depress the market for coal. ​ Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation.
Consequently, currency fluctuations could adversely affect the competitiveness of our coal in international markets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. ​ Our business involves many hazards and operating risks, some of which may not be fully covered by insurance.
Consequently, currency 29 Table of Contents fluctuations could adversely affect the competitiveness of our coal in international markets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. ​ Our business involves many hazards and operating risks, some of which may not be fully covered by insurance.
Coal mining consumes large quantities of commodities including steel, copper, rubber products and liquid fuels and requires the use of capital equipment. Some commodities, such as steel, are needed to comply with roof control plans required by regulation. The prices we pay for commodities and capital equipment are strongly impacted by the global market.
Coal mining consumes large quantities of commodities including steel, copper, rubber products and liquid fuels and requires the use of capital equipment. Some commodities, such as steel, are needed to comply with roof control 33 Table of Contents plans required by regulation. The prices we pay for commodities and capital equipment are strongly impacted by the global market.
Delays in receiving or shortages of this equipment, as well as the raw materials used in the manufacturing of supplies and mining equipment, which, in some cases, do not have ready substitutes, or the cancellation of any future supply contracts under which we obtain equipment 33 Table of Contents and other consumables, could limit our ability to obtain these supplies or equipment.
Delays in receiving or shortages of this equipment, as well as the raw materials used in the manufacturing of supplies and mining equipment, which, in some cases, do not have ready substitutes, or the cancellation of any future supply contracts under which we obtain equipment and other consumables, could limit our ability to obtain these supplies or equipment.
Under the amendments, a miner with at least fifteen years of underground coal mine employment (or surface mine employment with similar dust exposure) who can prove that he suffers from a totally disabling respiratory condition is entitled to a rebuttable presumption that his disability is caused by black lung.
Under the amendments, a miner with at least fifteen years of 44 Table of Contents underground coal mine employment (or surface mine employment with similar dust exposure) who can prove that he suffers from a totally disabling respiratory condition is entitled to a rebuttable presumption that his disability is caused by black lung.
Underground mining and related processing activities present inherent risks of injury to persons and damage to property and equipment. Our mines are subject to a number of operating risks that could disrupt operations, decrease production and increase the cost of mining for varying lengths of time, thereby adversely affecting our 29 Table of Contents operating results.
Underground mining and related processing activities present inherent risks of injury to persons and damage to property and equipment. Our mines are subject to a number of operating risks that could disrupt operations, decrease production and increase the cost of mining for varying lengths of time, thereby adversely affecting our operating results.
Delays and interruptions of rail services because of accidents, failure to complete construction of rail infrastructure, infrastructure damage, lack of rail or port capacity, weather-related problems, governmental regulation, terrorism, strikes, lock-outs, third-party actions or other events could impair our ability to supply coal to customers and adversely affect our profitability.
Delays and interruptions of rail services because of accidents, failure to complete construction of rail infrastructure, infrastructure damage, lack of rail or port capacity, weather-related problems, governmental regulation, terrorism, strikes, lockouts, third-party actions or other events could impair our ability to supply coal to customers and adversely affect our profitability.
Failure to meet those requirements could result in losses of prepaid royalties and, in some rare cases, could result in a loss of the lease itself. ​ While none of our employees who conduct mining operations are currently members of unions, our business could be adversely affected by union activities.
Failure to meet those requirements could result in losses of prepaid royalties and, in some rare cases, could result in a loss of the lease itself. ​ 35 Table of Contents While none of our employees who conduct mining operations are currently members of unions, our business could be adversely affected by union activities.
We expect that our compliance with these additional requirements, including the provisions of Section 404, will continue to substantially increase our legal and financial compliance costs and make some activities more time consuming and costly. ​ 46 Table of Contents ​ Your percentage of ownership in us may be diluted in the future.
We expect that our compliance with these additional requirements, including the provisions of Section 404, will continue to substantially increase our legal and financial compliance costs and make some activities more time consuming and costly. ​ Your percentage of ownership in us may be diluted in the future.
This could have a material adverse effect on our business, financial condition, cash flows and ability to pay dividends to our stockholders. ​ Our mines are located in areas containing oil and natural gas operations, which may require us to coordinate our operations with those of oil and natural gas drillers.
This could have a material adverse effect on our business, financial condition, cash flows and ability to pay dividends to our stockholders. 34 Table of Contents ​ Our mines are located in areas containing oil and natural gas operations, which may require us to coordinate our operations with those of oil and natural gas drillers.
This is known as being “permit-blocked.” Additionally, Yorktown and Mr. Atkins are each currently deemed an “owner or controller” of a number of other mining companies; as such, we could be permit-blocked based upon the violations of or permit-blocked status of an “owner or controller” of us.
This is known as being “permit-blocked.” Additionally, Yorktown and Mr. Atkins are each currently deemed an “owner or controller” of a number of other mining 36 Table of Contents companies; as such, we could be permit-blocked based upon the violations of or permit-blocked status of an “owner or controller” of us.
Numerous activist groups are devoting resources to anti-coal activities to minimize or eliminate the production of or use of coal as a source 42 Table of Contents of electricity generation, domestically and internationally. Participants in the coal mining industry are frequently targeted by activist groups that openly attempt to disrupt the industry.
Numerous activist groups are devoting resources to anti-coal activities to minimize or eliminate the production of or use of coal as a source of electricity generation, domestically and internationally. Participants in the coal mining industry are frequently targeted by activist groups that openly attempt to disrupt the industry.
We may also add new lines of business to our existing operations. 32 Table of Contents ​ Further, unexpected costs and challenges may arise whenever businesses with different operations or management are combined, and we may experience unanticipated delays in realizing the benefits of an acquisition.
We may also add new lines of business to our existing operations. ​ Further, unexpected costs and challenges may arise whenever businesses with different operations or management are combined, and we may experience unanticipated delays in realizing the benefits of an acquisition.
Globally the market is evolving to shorter term pricing. Some annual contracts have shifted to quarterly contracts and most volumes are being sold on an indexed basis, where prices are determined by averaging the leading spot indexes reported in the market and adjusting for quality. As a result, we are subject to fluctuations in market pricing.
Globally the market is evolving to shorter term pricing. Some annual contracts have shifted to quarterly contracts and most volumes 25 Table of Contents are being sold on an indexed basis, where prices are determined by averaging the leading spot indexes reported in the market and adjusting for quality. As a result, we are subject to fluctuations in market pricing.
These changes could have a material impact on our costs expended in association with the federal black lung program. ​ 44 Table of Contents We have reclamation, mine closing, and related environmental obligations under the SMCRA. If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated.
These changes could have a material impact on our costs expended in association with the federal black lung program. ​ We have reclamation, mine closing, and related environmental obligations under the SMCRA. If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated.
These efforts and developments, as well as concerted conservation and efficiency efforts, could also cause coal prices and sales of our coal to materially decline and could cause our costs to increase. ​ Other activist campaigns have urged companies to cease financing coal-driven businesses.
These efforts and developments, as well as concerted conservation and efficiency efforts, could also cause coal prices and sales of our coal to materially decline and could cause our costs to increase. 43 Table of Contents ​ Other activist campaigns have urged companies to cease financing coal-driven businesses.
Further, the development and use of emerging technologies in the generation, transmission, storage and consumption of energy, including renewable energy, battery storage, and energy efficiency technologies, may increase the availability of alternative energy sources or lower demand 26 Table of Contents for coal, resulting in lower prices and revenues.
Further, the development and use of emerging technologies in the generation, transmission, storage and consumption of energy, including renewable energy, battery storage, and energy efficiency technologies, may increase the availability of alternative energy sources or lower demand for coal, resulting in lower prices and revenues.
We are also required to post bonds for the cost of a coal mine as a condition of our mining activities. ​ Risks Related to Our Company Our ability to pay dividends may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions in debt instruments and by additional factors unrelated to our profitability.
We are also required to post bonds for the cost of a coal mine as a condition of our mining activities. ​ Risks Related to Our Company Our ability to pay dividends on our Class A common stock and our Class B common stock may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions in debt instruments and by additional factors unrelated to our profitability.
We could become subject to claims for toxic torts, natural resource damages and other damages as well as for the investigation and clean- 40 Table of Contents up of soil, surface water, groundwater, and other media.
We could become subject to claims for toxic torts, natural resource damages and other damages as well as for the investigation and clean-up of soil, surface water, groundwater, and other media.
If we fail to acquire or develop sufficient additional reserves over the long term to replace the reserves depleted by our production, our existing reserves could eventually be exhausted. ​ We are dependent on contractors for the successful completion of the development of our properties.
If we fail to acquire or develop sufficient additional reserves over the long term to replace the reserves depleted by our production, our existing reserves could eventually be exhausted. ​ We are dependent on contractors for the successful completion of the development of our properties. We regularly use contractors in the development of our mines.
Any investment into technology development and commercialization often involves a long wait until a return, if any, is achieved on such investment. We plan to make investments in research and development relating to our owned and licensed intellectual property and technology. Investments in new technology and processes are inherently speculative.
Any investment into technology development and commercialization often involves a long wait until a return, if any, is achieved on such investment. We plan to make investments in research and development relating to our owned and licensed intellectual property and technology.
The comment period for the EPA’s draft Selenium Technical Support Materials, intended to provide implementation support for states for the recommend selenium aquatic life criterion for freshwater ended on January 3, 2022.
The comment period for the EPA’s draft Selenium Technical Support Materials, intended to provide implementation support for states for the recommend selenium aquatic life criterion for freshwater ended on 40 Table of Contents January 3, 2022.
Like other coal companies, our business has been adversely affected by the COVID-19 pandemic and measures being taken to mitigate its impact. The pandemic has resulted in widespread adverse impacts on our employees, customers, suppliers and other parties with whom we have business relations.
Like other coal companies, our business was adversely affected by the COVID-19 pandemic and measures that were taken to mitigate its impact. The pandemic resulted in widespread adverse impacts on our employees, customers, suppliers and other parties with whom we have business relations.
In addition, such litigation could have a material adverse effect on our business, financial condition and results of operations. See “Part I, Item 3. Legal Proceedings.” ​
In addition, such litigation could have a material adverse effect on our business, financial condition and results of operations. See “Part I, Item 3. Legal Proceedings.” ​ Item 1B. Unresolved Staff Comments None.
The spread of COVID-19 has had, and continues to have, a negative impact on the financial markets, which may impact our ability to obtain additional financing.
The spread of COVID-19 had a negative impact on the financial markets, which may impact our ability to obtain additional financing.
If our board of directors elects to issue preferred stock, it could be more difficult for a third-party to acquire us.
Our Charter authorizes our board of directors to issue preferred stock without stockholder approval. If our board of directors elects to issue preferred stock, it could be more difficult for a third-party to acquire us.
Significant revenue from new technology investments may not be achieved for a number of years, if at all. 37 Table of Contents If we fail to protect our intellectual property rights, we could lose our ability to compete in the market.
Moreover, competing technologies may prevent us from gaining wide market acceptance of the technology. Significant revenue from new technology investments may not be achieved for a number of years, if at all. If we fail to protect our intellectual property rights, we could lose our ability to compete in the market.
These conflicts may not be resolved in our favor. ​ Our Charter and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock. Our Charter authorizes our board of directors to issue preferred stock without stockholder approval.
These conflicts may not be resolved in our favor. ​ Our Charter and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A common stock and Class B common stock.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant the holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or to veto specified transactions.
For example, we could grant the holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or to veto specified transactions.
Successful technical development of technologies associated with intellectual property does not guarantee successful commercialization. We may successfully complete the technical development of technologies associated with our owned or licensed intellectual property, but we may still fail to commercialize that technology at scale or at a cost attractive to the target industries.
We may successfully complete the technical development of technologies associated with our owned or licensed intellectual property, but we may still fail to commercialize that technology at scale or at a cost attractive to the target industries. Our success will depend largely on our ability to prove the capabilities and cost-effectiveness of the developed technology.
Any significant delays, interruptions or other limitations on the ability to transport our coal could negatively affect our operations.
Any significant delays, interruptions, or other limitations on the ability to transport our coal, including those similar to the rail-related constraints we experienced in 2022, could negatively affect our operations.
For example, in late-2018, we experienced a partial structural failure at one of the raw coal storage silos that feeds our Elk Creek plant in West Virginia, which idled our Elk Creek preparation plant for approximately one month. ​ 31 Table of Contents ​ If customers do not enter into, extend or honor contracts with us, our profitability could be adversely affected.
For example, in late-2018, we experienced a partial structural failure at one of the raw coal storage silos that feeds our Elk Creek plant in West Virginia, which idled our Elk Creek preparation plant for approximately one month.
Furthermore, even if we do successfully demonstrate the technology’s capabilities, potential customers may be more comfortable doing business with a larger, more established, more proven company than us. Moreover, competing technologies may prevent us from gaining wide market acceptance of the technology.
Upon demonstration, the technology may not have the capabilities they were designed to have or that we believed they would have, or they may be more expensive than anticipated. Furthermore, even if we do successfully demonstrate the technology’s capabilities, potential customers may be more comfortable doing business with a larger, more established, more proven company than us.
Alternatively, if a court were to find these provisions of our Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations. ​ If we fail to maintain an effective system of internal controls, such failure could cause investors to lose confidence in our reported financial information, which could harm our business and have a material adverse effect on the price of our common stock. ​ As described in our Annual Report on Form 10-K for the year ended December 31, 2021, management identified a material weakness in our internal controls over financial reporting related to information technology general controls in the areas of user access and segregation of duties related to certain information technology systems that support the Company’s financial reporting process.
Alternatively, if a court were to find these provisions of our Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations. ​ We have identified a material weakness in our internal controls over financial reporting.
Our preparation and loading facility at Berwind is in the start-up phase, and we expect full capacity at that location later in 2023. Some of the Berwind coal will continue to be washed at our active Knox Creek plant until our Berwind plant is fully up and running.
Our Berwind Complex will remain under development until we reach our full targeted annual coal production. Some of the Berwind coal will continue to be washed at our active Knox Creek plant until our Berwind plant is fully up and running. We also endeavor to purchase, relocate, and reassemble preparation plant assets at our Maben complex for future use.
Removed
Our Berwind Complex will remain 25 Table of Contents under development until we reach our full targeted annual coal production in the Pocahontas No. 4 seam, including a return to full production capacity in our Berwind No. 1 mine that was impacted by the ignition event during 2022.
Added
We cannot guarantee that we will be able to pay dividends in the future or what the actual dividends will be for any future periods. ● The market value of the Class B common stock could be adversely affected by events involving the other assets and businesses of the Company. ● Our new tracking stock capital structure could create conflicts of interest, and our Board may make decisions that could adversely affect only the holders of one class of our common stock. ​ Risks Related to Our Business Our properties have not yet been fully developed into producing coal mines and, if we experience any development delays or cost increases or are unable to complete the construction of our facilities, our business, financial condition and results of operations could be adversely affected.
Removed
At our RAM Mine, we may require access to either newly constructed preparation and loading facilities or arrangements with third parties to process and load our coal. Alternatively, we might mine the coal in a manner that allows us to ship the coal direct without washing.
Added
We also experienced a methane ignition at the Berwind No. 1 mine in the third quarter of 2022, which required the mine to be idled until production was restarted in the first quarter of 2023. ​ If customers do not enter into, extend or honor contracts with us, our profitability could be adversely affected.
Removed
We will analyze whether to expend capital to construct preparation facilities or enter into third-party processing arrangements.
Added
Investments in new technology and processes are inherently speculative. ​ 37 Table of Contents Successful technical development of technologies associated with intellectual property does not guarantee successful commercialization.
Removed
We regularly use contractors in the development of our mines and intend to use contractors if and when we construct facilities at the RAM Mine.
Added
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our Class A common stock and Class B common stock.
Removed
Our success will depend largely on our ability to prove the capabilities and cost-effectiveness of the developed technology. Upon demonstration, the technology may not have the capabilities they were designed to have or that we believed they would have, or they may be more expensive than anticipated.
Added
Our systems and procedures for internal control over financial reporting and the disclosure controls related to them have, and may have in the future, material weaknesses, which may adversely affect the value of our common stock. ​ We are responsible for maintaining systems and documentation necessary to evaluate the effectiveness of our internal control over financial reporting.

… 83 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Annual Report. ​ 61 Table of Contents PART II
Biggest changeItem 4. Mine Safety Disclosures The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Annual Report. ​ ​ 69 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+10 added−1 removed0 unchanged
Biggest changeRefer to Part II, Item 8, Note 9 for the Company’s equity compensation plan information. Stock repurchases . The Company routinely allows employees to surrender common stock to pay estimated taxes upon the vesting or exercise of stock-based compensation awards.
Biggest changeStock repurchases . The Company routinely allows employees to surrender common stock that would be issuable upon the vesting or exercise of stock-based compensation awards to pay estimated taxes. The value of common stock surrendered by employees is determined based on the price of the Company’s common stock at the time of relinquishment.
The Company anticipates paying dividends on a quarterly basis at the newly approved amount; however, future declarations of dividends are subject to Board of Directors’ approval and may be adjusted as business needs or market conditions change. Equity Compensation Plans . The Company does not have any non-stockholder approved equity compensation plans.
The Company anticipates declaring cash dividends on a quarterly basis at the newly approved amount; however, future declarations of dividends are subject to Board of Directors’ approval and may be adjusted as business needs or market conditions change.
As of the close of business on February 28, 2023, there were eighty-four holders of record of our common stock. Because many of our common shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these holders of record. Dividends.
Because many of our common shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these holders of record. Dividends.
Item 5. Market for Registrant’s Common Equity and Related Shareholder Matters Market Information. Our common stock is listed on the NASDAQ Global Select Market under the symbol “METC” and our Notes are listed on the NASDAQ Global Select Market under the symbol “METCL.” Holders.
Market Information. Our Class A and Class B common stock are listed on the NASDAQ Global Select Market under the symbols “METC” and “METCB,” respectively, and our Notes are listed on the NASDAQ Global Select Market under the symbol “METCL.” Holders.
The value of common stock tendered by employees is determined based on the price of the Company’s common stock at the time of relinquishment. There were no other repurchases of common shares during the quarter or year ended December 31, 2022.
There were no repurchases of common shares during the quarter or year ended December 31, 2023. 70 Table of Contents Item 6. [Reserved] ​
Removed
On December 8, 2022, the Company announced that its board of directors declared a $0.1250 per common share cash dividend payable on March 15, 2023 to shareholders of record as of March 1, 2023, which represents a 10% increase in the quarterly cash dividends paid in 2022 of $0.1133 per common share.
Added
Market for Registrant’s Common Equity and Related Shareholder Matters On June 12, 2023, an amendment to our amended and restated certificate of incorporation was approved by shareholder vote to reclassify the Company’s existing common stock as shares of Class A common stock, par value $0.01 per share, and create a separate Class B common stock having a par value of $0.01 per share.
Added
The initial distribution of Class B common stock occurred on June 21, 2023 via a stock dividend to existing holders of common stock as of May 12, 2023. On the date of initial distribution, each holder of common stock received 0.2 shares of Class B common stock for every one share of existing common stock held on the record date.
Added
As of the close of business on February 29, 2024, there were 87 holders of record of our Class A common stock and 76 holders of record of our Class B common stock.
Added
In addition to the stock dividend discussed above, the Company declared $27.5 million of total cash dividends during 2023, which includes $5.6 million under the Company’s single class structure, $17.0 million to Class A shareholders, and $3.6 million to Class B shareholders as well as $1.2 million of forfeitable dividends subject to the vesting conditions of outstanding restricted stock units and performance stock units.
Added
For holders of Class A common stock, including common stock reclassified to Class A common stock, cash dividends were declared quarterly in the amount of $0.125 per share with the exception of the final quarterly dividend, which was declared in the amount of $0.1375 per share.
Added
For holders of Class B common stock, cash dividends were declared in the amount of $0.165 per share and $0.249 per share in the third and fourth quarter, respectively.
Added
In addition, the Company declared another quarterly cash dividend in February 2024, subsequent to the date of the financial statements, in the amount of $0.242 per share of Class B common stock. All cash dividends declared to date for Class B common stock were based on 20% of CORE royalty and infrastructure fees for the previous quarter.
Added
The Company anticipates continuing to declare quarterly cash dividends based on 20% of CORE royalty and infrastructure fees; however, future declarations of dividends are subject to the sole discretion of the Company’s Board of Directors.
Added
In addition, the Board of Directors retains the power to change or add expense allocation policies related to CORE, redefine CORE assets, and redetermine CORE’s per-ton usage fees at any time without shareholder approval.
Added
In regard to stock dividends, such as the initial non-cash distribution of Class B common stock discussed above, there are currently no plans to declare additional dividends payable in stock. Equity Compensation Plans . The Company does not have any non-stockholder approved equity compensation plans. Refer to Part II, Item 8, Note 9 for the Company’s equity compensation plan information.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+40 added−37 removed31 unchanged
Biggest changeWe expect to be producing on an annualized four million ton per year run rate by the third quarter of 2023. ​ 64 Table of Contents Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ ​ $ 565,688 ​ $ 283,394 ​ $ 168,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (exclusive of items shown separately below) ​ 332,960 ​ ​ 195,412 ​ ​ 145,503 Asset retirement obligations accretion ​ 1,115 ​ ​ 615 ​ ​ 570 Depreciation, depletion, and amortization ​ ​ ​ 41,194 ​ ​ 26,205 ​ ​ 20,912 Selling, general and administrative expenses ​ ​ ​ 40,032 ​ ​ 21,629 ​ ​ 21,023 Total costs and expenses ​ ​ ​ 415,301 ​ ​ 243,861 ​ ​ 188,008 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ 150,387 ​ ​ 39,533 ​ ​ (19,093) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ ​ ​ 2,637 ​ ​ 7,429 ​ ​ 11,926 Interest expense, net ​ ​ ​ (6,829) ​ ​ (2,556) ​ ​ (1,224) Income (loss) before tax ​ ​ ​ 146,195 ​ ​ 44,406 ​ ​ (8,391) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense (benefit) ​ 30,153 ​ ​ 4,647 ​ ​ (3,484) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ ​ $ 116,042 ​ $ 39,759 ​ $ (4,907) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ $ 2.63 ​ $ 0.90 ​ $ (0.12) Diluted ​ ​ $ 2.60 ​ $ 0.90 ​ $ (0.12) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ ​ $ 204,555 ​ $ 79,042 ​ $ 18,455 ​ Net income and Adjusted EBITDA were significantly higher compared to 2021, which was driven by higher sales pricing in 2022.
Biggest changeThe Company also continues its work to advance new carbon product technologies with the goal of commercializing products that use coal in both an improved economic and environmental manner. 72 Table of Contents ​ Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands, except per share amounts) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ ​ $ 693,524 ​ $ 565,688 ​ $ 283,394 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (exclusive of items shown separately below) ​ 493,793 ​ ​ 332,960 ​ ​ 195,412 Asset retirement obligations accretion ​ 1,403 ​ ​ 1,115 ​ ​ 615 Depreciation, depletion, and amortization ​ ​ ​ 54,252 ​ ​ 41,194 ​ ​ 26,205 Selling, general and administrative expenses ​ ​ ​ 48,831 ​ ​ 40,032 ​ ​ 21,629 Total costs and expenses ​ ​ ​ 598,279 ​ ​ 415,301 ​ ​ 243,861 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ 95,245 ​ ​ 150,387 ​ ​ 39,533 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ ​ ​ 18,321 ​ ​ 2,637 ​ ​ 7,429 Interest expense, net ​ ​ ​ (8,903) ​ ​ (6,829) ​ ​ (2,556) Income before tax ​ ​ ​ 104,663 ​ ​ 146,195 ​ ​ 44,406 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ 22,350 ​ ​ 30,153 ​ ​ 4,647 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ $ 82,313 ​ $ 116,042 ​ $ 39,759 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic - Single class (through 6/20/2023) ​ ​ $ 0.71 ​ $ 2.63 ​ $ 0.90 Basic - Class A (6/21/2023 - 12/31/2023) ​ ​ $ 1.06 ​ $ — ​ $ — Total ​ ​ $ 1.77 ​ $ 2.63 ​ $ 0.90 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic - Class B (6/21/2023 - 12/31/2023) ​ ​ $ 0.42 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted - Single class (through 6/20/23) ​ ​ $ 0.70 ​ $ 2.60 ​ $ 0.90 Diluted - Class A (6/21/2023 - 12/31/2023) ​ ​ $ 1.03 ​ $ — ​ $ — Total ​ ​ $ 1.73 ​ $ 2.60 ​ $ 0.90 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted - Class B (6/21/2023 - 12/31/2023) ​ ​ $ 0.40 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ ​ $ 182,126 ​ $ 204,555 ​ $ 79,042 ​ Net income and Adjusted EBITDA were lower in 2023 compared to 2022, despite the increase in sales volume, due to lower sales pricing and higher cost per ton sold in 2023.
When events or changes in circumstances occur that trigger a recoverability test, the test is performed comparing projected undiscounted cash flows from the use and eventual disposition of an asset or asset group to its carrying amount.
When events or changes in circumstances occur that trigger a recoverability test, the test is performed by comparing projected undiscounted cash flows from the use and eventual disposition of an asset or asset group to its carrying amount.
Non-GAAP cash cost per ton sold is calculated as cash cost of sales less transportation costs and idle mine costs, divided by tons sold.
Non-GAAP cash cost per ton sold (FOB mine) is calculated as cash cost of sales less transportation costs and idle mine costs, divided by tons sold.
The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Cash cost per ton sold is not a measure of financial performance in accordance with U.S. GAAP and, therefore, should not be considered as a substitute to cost of sales under U.S.
The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Cash cost per ton sold (FOB mine) is not a measure of financial performance in accordance with U.S. GAAP and, therefore, should not be considered as a substitute to cost of sales under U.S.
Please see Part I, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2021 Annual Report on Form 10-K for a discussion of the Company’s cash flows for the year ended December 31, 2021 as compared to the year ended December 31, 2020.
Please see Part I, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2022 Annual Report on Form 10-K for a discussion of the Company’s cash flows for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
Year Ended December 31, 2021 compared to Year Ended December 31, 2020 Please see Part I, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2021 Annual Report on Form 10-K for a discussion of the results of operation for the year ended December 31, 2021 as compared to the year ended December 31, 2020.
Year Ended December 31, 2022 compared to Year Ended December 31, 2021 Please see Part I, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2022 Annual Report on Form 10-K for a discussion of the results of operation for the year ended December 31, 2022 as compared to the year ended December 31, 2021 .
Our plan is to continue development of our existing properties and grow annual production over the next few years to approximately 6.5 million clean tons of metallurgical coal, subject to market conditions, permitting and additional capital deployment in the medium-term. We may make acquisitions of reserves or infrastructure that continue our focus on advantaged geology and lower costs.
Our plan is to continue development of our existing properties and grow annual production over the next few years to approximately seven million clean tons of metallurgical coal, subject to market conditions, permitting and additional capital deployment in the medium-term. We may make acquisitions of reserves or infrastructure that continue our focus on advantaged geology and lower costs.
We define Adjusted EBITDA as net income plus net interest expense; stock-based compensation; depreciation, depletion, and amortization expenses; income taxes; certain non-operating expenses (charitable contributions); and accretion of asset retirement obligations. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as a substitute to U.S.
We define Adjusted EBITDA as net income plus net interest expense; stock-based compensation; depreciation, depletion, and amortization expenses; income taxes; certain non-operating expenses (charitable contributions); and accretion of asset retirement obligations. A reconciliation of net income to Adjusted EBITDA is included below. 75 Table of Contents Adjusted EBITDA is not intended to serve as a substitute to U.S.
If the projected undiscounted cash flows are less than the carrying amount, an impairment loss is recorded for the excess of the carrying amount over the estimated fair value of the asset or asset group, if any. 73 Table of Contents We make various assumptions, including assumptions regarding future cash flows in our assessments of long-lived assets for impairment.
If the projected undiscounted cash flows are less than the carrying amount, an impairment loss is recorded for the excess of the carrying amount over the estimated fair value of the asset or asset group, if any. We make various assumptions, including assumptions regarding future cash flows in our assessments of long-lived assets for impairment.
Actual production, revenues, and expenditures with respect to reserves and resources will likely vary from estimates and these variances may be material. Variances could affect our projected future revenues and expenditures, valuation of coal reserves and resources, and amortization and depletion of mine development costs and mineral rights. 72 Table of Contents Asset Retirement Obligations .
Actual production, revenues, and expenditures with respect to reserves and resources will likely vary from estimates and these variances may be material. Variances could affect our projected future revenues and expenditures, valuation of coal reserves and resources, and amortization and depletion of mine development costs and mineral rights. Asset Retirement Obligations .
The terms of the new facility include covenants limiting the ability of the Company to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and similar fundamental changes, make restricted payments, and enter into transactions with affiliates.
The terms of the Revolving Credit facility include covenants limiting the ability of the Company to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and similar fundamental changes, make restricted payments, and enter into transactions with affiliates.
The Company’s total liability for finance leases at December 31, 2022 was $10.9 million, which includes $6.0 million due in 2023 and $4.9 million due thereafter. Refer to Notes 7 and 8 to the Consolidated Financial Statements included in Item 8 of Part I in this Annual Report on Form 10-K for additional information on indebtedness.
The Company’s total liability for finance leases at December 31, 2023 was $10.4 million, which includes $5.5 million due in 2024 and $4.9 million due thereafter. Refer to Notes 7 and 8 to the Consolidated Financial Statements included in Item 8 of Part I in this Annual Report on Form 10-K for additional information on indebtedness and leases.
The acquisitions of Ramaco Coal and Maben Coal help reduce royalty expenses associated with the Company’s metallurgical operations in the Appalachian basin and complement our existing low-vol portfolio, both of which help achieve the Company’s objective of remaining among the lowest cost producers of metallurgical coal in the U.S..
The acquisition of Ramaco Coal helps to reduce royalty expenses associated with the Company’s metallurgical operations in the Appalachian basin and, along with the acquisition of Maben Coal, complement our existing low-vol portfolio, both of which help achieve the Company’s objective of remaining among the lowest cost producers of metallurgical coal in the U.S.
Events and circumstances that may trigger a recoverability assessment include, but are not limited to, a current expectation that a long-lived asset will be disposed of significantly before the end of its previously estimated useful life, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in the physical condition of the asset(s), and an accumulation of costs significantly in excess of the amount originally expected.
Additional judgment may be required for development properties. 82 Table of Contents Events and circumstances that may trigger a recoverability assessment include, but are not limited to, a current expectation that a long-lived asset will be disposed of significantly before the end of its previously estimated useful life, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in the physical condition of the asset(s), and an accumulation of costs significantly in excess of the amount originally expected.
We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. Overview Our primary source of revenue is the sale of metallurgical coal. We are a pure play metallurgical coal company with 62 million and 1,156 million measured and indicated tons of high-quality metallurgical coal reserves and resources, respectively.
We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. Overview Our primary source of revenue is the sale of metallurgical coal. We are a pure-play metallurgical coal company with 59 million reserve tons and 1,119 million measured and indicated resource tons of high-quality metallurgical coal.
Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenue less transportation costs, divided by tons sold.
Non-GAAP revenue per ton sold (FOB mine) is calculated as coal sales revenue less transportation revenues and demurrage, divided by tons sold.
Actual income taxes could vary from the estimates and judgments above due to future changes in income tax law, significant changes in the jurisdictions in which we operate, our ability to generate sufficient future taxable income, or unpredicted results from the final determination of each year’s liability by taxing authorities.
The Company had no valuation allowance at December 31, 2023. Actual income taxes could vary from the estimates and judgments above due to future changes in income tax law, significant changes in the jurisdictions in which we operate, our ability to generate sufficient future taxable income, or unpredicted results from the final determination of each year’s liability by taxing authorities.
Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which is generally at the mine level or at the mining complex level for mines that share infrastructure and/or developed access. Additional judgment may be required for development properties.
Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which is generally at the mine level or at the mining complex level for mines that share infrastructure and/or developed access.
Total surety bonds at December 31, 2022, were $25.9 million. Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with U.S.
Total surety bonds at December 31, 2023, were $27.2 million. Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with U.S.
Take or pay obligations represent those liquidated damage obligations as determined by contract volume minimums for transportation of coal at the representative rates of transportation or a portion thereof. Additional take or pay commitments totaling $15.1 million were entered into after the balance sheet date and have been excluded from the table above.
Take-or-pay obligations represent those liquidated damage obligations as determined by contract volume minimums for transportation of coal at the representative rates of transportation or a portion thereof. Additional take-or-pay commitments for the next annual period were renewed after the balance sheet date and have been excluded from the table above.
In addition to the debts discussed above, the Company finances the payment of premiums associated with various insurance policies. The Company’s liability at December 31, 2022 was $4.6 million, which must be repaid in 2023. The Company also has various finance leases for mining equipment, which are generally for terms up to 36 months.
In addition to the debts discussed above, the Company finances the payment of premiums associated with various insurance policies. The Company’s liability at December 31, 2023 was $4.0 million, which must be repaid in 2024. The Company also has various finance leases for mining equipment, which generally include terms from three to five years.
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenue and expenses reported for the period then ended. Coal Reserves . Our coal reserves and resources are updated on an annual basis.
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenue and expenses reported for the period then ended. 81 Table of Contents Coal Reserves .
GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands) 2022 2021 2020 Reconciliation of Net Income to Adjusted EBITDA ​ ​ ​ Net income (loss) ​ $ 116,042 ​ $ 39,759 ​ $ (4,907) Depreciation, depletion, and amortization ​ 41,194 ​ 26,205 ​ 20,912 Interest expense, net ​ 6,829 ​ 2,556 ​ 1,224 Income tax expense (benefit) ​ 30,153 ​ 4,647 ​ (3,484) EBITDA ​ 194,218 ​ 73,167 ​ 13,745 Stock-based compensation ​ 8,222 ​ 5,260 ​ 4,140 Other non-operating expenses ​ ​ 1,000 ​ ​ — ​ ​ — Accretion of asset retirement obligation ​ 1,115 ​ 615 ​ 570 Adjusted EBITDA ​ $ 204,555 ​ $ 79,042 ​ $ 18,455 ​ 67 Table of Contents Non-GAAP revenue per ton.
GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands) 2023 2022 2021 Reconciliation of Net Income to Adjusted EBITDA ​ ​ ​ Net income ​ $ 82,313 ​ $ 116,042 ​ $ 39,759 Depreciation, depletion, and amortization ​ 54,252 ​ 41,194 ​ 26,205 Interest expense, net ​ 8,903 ​ 6,829 ​ 2,556 Income tax expense ​ 22,350 ​ 30,153 ​ 4,647 EBITDA ​ 167,818 ​ 194,218 ​ 73,167 Stock-based compensation ​ 12,905 ​ 8,222 ​ 5,260 Other non-operating expenses ​ ​ — ​ ​ 1,000 ​ ​ — Accretion of asset retirement obligation ​ 1,403 ​ 1,115 ​ 615 Adjusted EBITDA ​ $ 182,126 ​ $ 204,555 ​ $ 79,042 ​ Non-GAAP revenue per ton sold.
Indebtedness At December 31, 2022, we had $128.9 million of outstanding debts, or $127.2 million net of unamortized discounts and issuance costs.
Indebtedness At December 31, 2023, we had $91.4 million of outstanding debts, or $90.2 million net of unamortized discounts and issuance costs.
We anticipate a shift to more export sales during 2023 compared to 2022, which may lead to greater volatility in revenues due to index-based pricing. 68 Table of Contents Liquidity and Capital Resources Our primary source of cash is proceeds from the sale of our coal production to customers.
We expect the shift to more export sales in the Company’s mix of revenue that occurred in 2023 to continue during 2024, which may lead to volatility in revenues due to index-based pricing. Liquidity and Capital Resources Our primary source of cash is proceeds from the sale of our coal production to customers.
Estimating the future occupational disease (pneumoconiosis) benefits requires management to make estimates and judgments regarding timing and existence of a liability utilizing third-party actuaries assist in preparing what constitutes adequate liability amounts.
Estimating the future occupational disease (pneumoconiosis) benefits requires management to make estimates and judgments regarding timing and existence of a liability utilizing third-party actuaries to assist in preparing what constitutes adequate liability amounts. Inherent in the calculation are numerous assumptions and judgments including the ultimate costs, mortality factors, credit-adjusted discount rates, and timing of settlement.
These estimates are subject to uncertainty due to a variety of factors, including extended lag times in the reporting and resolution of claims, changes in claim settlement patterns, and future cost trends. As a result, actual costs could differ significantly from the estimated amounts. Impairment of Long-lived Assets.
These estimates are subject to uncertainty due to a variety of factors, including limited Ramaco-specific claim volume and future cost trends. As a result, volatility in future estimates may occur and actual costs could differ significantly from the estimated amounts. Impairment of Long-lived Assets.
Cash flow information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands) 2022 2021 2020 Consolidated statement of cash flow data: ​ ​ ​ Cash flows provided by operating activities ​ $ 187,870 ​ $ 53,340 ​ $ 13,312 Cash flows used for investing activities ​ (145,708) ​ (59,613) ​ (24,753) Cash flows (used for) provided by financing activities ​ (28,495) ​ 22,369 ​ 11,286 Net change in cash and cash equivalents and restricted cash ​ $ 13,667 ​ $ 16,096 ​ $ (155) ​ Cash flows provided by operating activities during 2022 increased $134.5 million versus the prior year primarily due to higher cash earnings.
Cash flow information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands) 2023 2022 2021 Consolidated statement of cash flow data: ​ ​ ​ Cash flows provided by operating activities ​ $ 161,036 ​ $ 187,870 ​ $ 53,340 Cash flows used for investing activities ​ (72,211) ​ (145,708) ​ (59,613) Cash flows (used for) provided by financing activities ​ (82,517) ​ (28,495) ​ 22,369 Net change in cash and cash equivalents and restricted cash ​ $ 6,308 ​ $ 13,667 ​ $ 16,096 ​ Cash flows provided by operating activities during 2023 decreased $26.8 million versus the prior year driven by lower cash earnings.
We include amounts billed by us for transportation to our customers within revenue and transportation costs incurred within cost of sales. For the year ended December 31, 2022, we had revenue of $565.7 million from the sale of 2.45 million tons of coal including 0.05 million tons of purchased coal.
We include amounts billed by us for transportation to our customers within revenue and transportation costs incurred within cost of sales. 73 Table of Contents For the year ended December 31, 2023, we had revenue of $693.5 million from the sale of 3.5 million tons of coal.
Of this amount, 51% was sold in North American markets and 49% was sold in export markets, excluding Canada. We purchase coal from third parties for sale for our own account from time to time; however, sales of higher-margin Company produced coal made up 98% of total sales in both 2022 and 2021.
North American markets made up 58% of our 2022 revenues and export markets, excluding Canada, accounted for 42% of our 2022 revenues. We purchase coal from third parties for sale for our own account from time to time; however, sales of Company-produced coal made up 95% and 98% of total sales in 2023 and 2022, respectively.
Of these amounts, $75.6 million is expected to be repaid in 2023, including $20.0 million of revolver borrowings that were repaid shortly after the balance sheet date using funds from current operations and $49.6 million of acquisition financing due in 2023 (of which $40.0 million is due to a related party).
Of these amounts, $56.5 million is expected to be repaid in 2024, including $42.5 million of revolver borrowings that were repaid shortly after the balance sheet date using funds from current operations and $11.4 million of acquisition financing that is contractually due in 2024.
There are numerous uncertainties inherent in estimating quantities and values of coal reserves and resources, including many factors beyond our control. As a result, estimates of coal reserves and resources are by their nature uncertain. Information about our reserves and resources consists of estimates based on engineering, economic, and geological data assembled by third-party qualified persons.
Our coal reserves and resources are generally updated on an annual basis. There are numerous uncertainties inherent in estimating quantities and values of coal reserves and resources, including many factors beyond our control. As a result, estimates of coal reserves and resources are by their nature uncertain.
Our indebtedness was comprised of $61.0 million related to the financing of significant acquisitions (of which $40.0 million is related party debt), $34.5 million of Senior Notes ($32.8 million net of unamortized discounts and issuance costs), $25.0 million of outstanding borrowings under the Revolving Credit Facility, and $8.4 million of various equipment loans.
Our indebtedness was comprised of $42.5 million of outstanding borrowings under the Revolving Credit Facility, $34.5 million of Senior Notes ($33.3 million net of unamortized discounts and issuance costs), $11.4 million of unpaid financing related to the Maben Coal assets acquisition, and $3.0 of various equipment loans.
Factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include the following: ● Timely delivery of our product by rail and other transportation carriers; ● Timely payment of accounts receivable by our customers; ● Cost overruns in our purchases of equipment needed to complete our mine development plans; ● Delays in completion of development of our various mines which would reduce the coal we would have available to sell and our cash flow from operations; and ● Adverse changes in the metallurgical coal markets that would reduce the expected cash flow from operations. ​ Capital Requirements Our primary use of cash includes capital expenditures for mine development, infrastructure, and equipment.
Factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include the following: ● Timely delivery of our product by rail and other transportation carriers; ● Late payments of accounts receivable by our customers; ● Cost overruns in our purchases of equipment needed to complete our mine development plans; ● Delays in completion of development of our various mines, processing plants and refuse disposal facilities, which would reduce the coal we would have available to sell and our cash flow from operations; and ● Adverse changes in the metallurgical coal markets that would reduce the expected cash flow from operations. ​ If future cash flows were to become insufficient to meet our liquidity needs or capital requirements, due to changes in macroeconomic conditions or otherwise, we may reduce our expected level of capital expenditures for new mine production and/or fund a portion of our capital expenditures through the issuance of debt or equity securities, new debt arrangements, or from other sources such as asset sales.
Refer to Non-GAAP Financial Measures below for an explanation of the Company’s calculation of Adjusted EBITDA. Year Ended December 31, 2022 compared to Year Ended December 31, 2021 Revenue . Our revenue includes sales to customers of Company produced coal as well as smaller amounts of coal purchased from third parties.
Year Ended December 31, 2023 compared to Year Ended December 31, 2022 Revenue . Our revenue includes sales to customers of Company-produced coal as well as smaller amounts of coal purchased from third parties.
As of December 31, 2022, we had entered into forward sales contracts with certain North American customers for 2023 on a fixed price basis for 1.2 million tons of coal at an average realizable price of $198/ton FOB mine.
The annual contracting season with North American steel producers generally occurs in late-summer through the fall. As of December 31, 2023, we had entered into forward sales contracts with certain North American customers on a fixed price basis for 1.4 million tons of coal at an average realizable price of $166 per ton, excluding freight.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2022 ​ Year ended December 31, 2021 ​ Company Purchased ​ ​ Company Purchased ​ ​ (In thousands, except per ton amounts) Produced Coal ​ Total Produced Coal ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ $ 323,550 ​ $ 9,410 ​ $ 332,960 ​ $ 190,056 ​ $ 5,356 ​ $ 195,412 Less: Adjustments to reconcile to Non-GAAP cash cost of sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation costs ​ (57,300) ​ (813) ​ (58,113) ​ (33,934) ​ (1,225) ​ (35,159) Idle mine costs ​ (9,474) ​ ​ — ​ ​ (9,474) ​ ​ — ​ ​ — ​ ​ — Non-GAAP cash cost of sales ​ $ 256,776 ​ $ 8,597 ​ $ 265,373 ​ $ 156,122 ​ $ 4,131 ​ $ 160,253 Tons sold ​ 2,396 ​ 54 ​ 2,450 ​ 2,239 ​ 47 ​ 2,286 Cash cost per ton sold ​ $ 107 ​ $ 158 ​ $ 108 ​ $ 70 ​ $ 88 ​ $ 70 ​ 2023 Sales Commitments As of December 31, 2022, we had entered into forward sales contracts for approximately 1.5 million tons at an average fixed price of $202/ton as well as roughly 0.7 million additional tons priced against various benchmark indices.
GAAP. ​ ​ ​ 76 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2023 ​ Year ended December 31, 2022 ​ Company Purchased ​ ​ Company Purchased ​ ​ (In thousands, except per ton amounts) Produced Coal ​ Total Produced Coal ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ $ 468,992 ​ $ 24,801 ​ $ 493,793 ​ $ 323,550 ​ $ 9,410 ​ $ 332,960 Less: Adjustments to reconcile to Non-GAAP cash cost of sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation costs ​ (101,564) ​ (4,175) ​ (105,739) ​ (57,300) ​ (813) ​ (58,113) Idle mine costs ​ (3,978) ​ ​ — ​ ​ (3,978) ​ ​ (9,474) ​ ​ — ​ ​ (9,474) Non-GAAP cash cost of sales ​ $ 363,450 ​ $ 20,626 ​ $ 384,076 ​ $ 256,776 ​ $ 8,597 ​ $ 265,373 Tons sold ​ 3,299 ​ 156 ​ 3,455 ​ 2,396 ​ 54 ​ 2,450 Non-GAAP cash cost per ton sold (FOB mine) ​ $ 110 ​ $ 132 ​ $ 111 ​ $ 107 ​ $ 158 ​ $ 108 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refer to coal sales information for cost per ton sold (GAAP) calculations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 Sales Commitments As of December 31, 2023, we had entered into forward sales contracts for approximately 1.4 million tons to North American customers at an average fixed price of $166 per ton, excluding freight, as well as roughly 2.1 million additional tons to export customers priced against various benchmark indices.
During 2022 we spent $123.0 million, over 75% of which related to ongoing growth projects, including the increase in capacity to accommodate higher production levels at the Elk Creek and Berwind mining complexes. We also used cash to acquire Ramaco Coal and Maben Coal assets in 2022, which totaled $23.6 million.
Accounts payable were $51.6 million at December 31, 2023, up from December 31, 2022 due to increased spending. Capital Requirements During 2022 we spent $123.0 million for capital additions, over 75% of which related to ongoing growth projects, including the increase in capacity to accommodate higher production levels at the Elk Creek and Berwind mining complexes.
Refer to Critical Accounting Policies and Estimates below as well as Note 5 to the Consolidated Financial Statements included in Item 8 of Part I in this Annual Report on Form 10-K for additional information. Estimated payments related to worker’s compensation and occupational disease obligations have also been excluded from the table above.
Estimated payments related to worker’s compensation and occupational disease obligations have also been excluded from the table above. Refer to Critical Accounting Policies and Estimates below for additional information related to these obligations.
Asset retirement obligations have been excluded from the table above. Accounting for asset retirement obligations requires a number of estimates, including the amount and timing of payments to satisfy the obligation. The total liability recognized on the Company’s balance sheet for asset retirement obligations was $28.9 million at December 31, 2022.
These commitments are estimated at approximately $14 million based on last year’s average rate. Asset retirement obligations have been excluded from the table above. Accounting for asset retirement obligations requires a number of estimates, including the amount and timing of payments to satisfy the obligation.
Refer to Note 2—Summary of Significant Accounting Policies—Concentrations and Note 11—Revenues in Item 8, Part II for additional information regarding sales to customers. Cost of sales. Our cost of sales totaled $333.0 million for 2022 as compared to $195.4 million for 2021. The 70% increase versus the prior year was driven primarily by inflationary pressures on labor and supplies.
Refer to Note 2—Summary of Significant Accounting Policies—Concentrations and Note 11—Revenues in Item 8, Part II for additional information regarding sales to customers. Cost of sales. Our cost of sales increased 48% from 2022, which was driven by the increase in tons sold discussed above.
During 2022, we sold 2.5 million tons of coal. Of this, 58% was sold in North American markets and 42% was sold in export markets, excluding Canada, principally to Europe, South America, Asia and Africa. The Company is responsible for rail and loadout costs for coal sold into export markets. During 2021, we sold 2.3 million tons of coal.
North American markets made up 33% of our 2023 revenues and export markets, excluding Canada, accounted for 67% of our 2023 revenues. The Company is responsible for rail and loadout costs for coal sold into export markets. During 2022, we sold 2.5 million tons of coal.
The terms of the new facility also contain a financial covenant that requires the Company to maintain a fixed charge coverage ratio of not less than 1.10:1.00 calculated as of the last day of each fiscal quarter starting with the first quarter of 2023.
The terms of the facility also require the Company to maintain certain covenants, including fixed charge ratio and compensating balance requirements. A fixed charge coverage ratio of not less than 1.10:1.00, calculated as of the last day of each fiscal quarter, must be maintained by the Company.
Production is also expected to increase at Elk Creek commensurate with the increase in processing capacity. ​ On July 10, 2022, we experienced a methane ignition at the Berwind No. 1 mine, which was one of the active mines at our Berwind mining complex.
We completed the expansion of processing capacity at the Elk Creek preparation plant in 2023, which now has an annualized processing and shipping capacity of approximately three million tons per year. ​ On July 10, 2022, we experienced a methane ignition at the Berwind No. 1 mine, which was one of the active mines at our Berwind mining complex.
Export sales often contain index-based pricing and, therefore, could lead to greater volatility in pricing and revenues compared to 2022. In 2022, our capital expenditures were $123.0 million, excluding cash paid for the acquisitions of Ramaco Coal and Maben Coal assets which totaled $23.6 million as well as capitalized interest of $1.1 million.
In 2022, our capital expenditures were $123.0 million, excluding cash paid for the acquisitions of Ramaco Coal and Maben Coal assets which totaled $23.6 million as well as capitalized interest of $1.1 million. The decrease in capital expenditures was due to the Company’s progress related to strategic growth projects at our Elk Creek and Berwind mining complexes.
The remaining amount of $53.3 million, or $51.6 net of unamortized discounts and issuance costs, is mostly comprised of the Senior Notes due in 2026. 69 Table of Contents The Company’s outstanding debt increased approximately $83.9 million in 2022 and was due primarily to the financing of the acquisitions of Ramaco Coal and Maben Coal during the year as well as revolver borrowings associated with the management of our normal operating cash position that remained outstanding at the reporting date.
The remaining amount of $34.9 million, or $33.7 net of unamortized discounts and issuance costs, is mostly comprised of the Senior Notes due in 2026. 78 Table of Contents The Company’s outstanding debt decreased approximately $37.0 million in 2023 and was due primarily to the repayment of financing associated with the previous acquisitions of Ramaco Coal and Maben Coal in the amount of $40.0 million and $9.6 million, respectively.
This is due to a combination of factors, including changes in demand, variations in the types of coal qualities being purchased, fluctuations in steel prices, and other macroeconomic trends. In addition, we anticipate a shift to more export sales in the Company’s mix of revenues during 2023.
This level of pricing in 2023 is lower than the average price of $198 per ton that was obtained during the previous contracting season for North America. This is due to a combination of factors, including changes in demand, variations in the types of coal qualities being purchased, fluctuations in steel prices, and other macroeconomic trends.
The overall impact to pre-tax earnings in 2022 was immaterial except for idle mine costs of $9.5 million recognized during the year. Production from the Berwind No. 1 mine restarted in the first quarter of 2023.
There were no personnel in the mine at the time of the incident and no injuries or fatalities occurred. The overall impact to pre-tax earnings in 2022 was immaterial except for idle mine costs of $9.5 million recognized during the year. The Company subsequently recognized other income of $8.1 million in 2023 related to insurance proceeds received for the event.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2022 ​ Year ended December 31, 2021 ​ Company Purchased ​ ​ Company Purchased ​ ​ (In thousands, except per ton amounts) Produced Coal ​ Total Produced Coal ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 553,830 ​ $ 11,858 ​ $ 565,688 ​ $ 276,725 ​ $ 6,669 ​ $ 283,394 Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation costs ​ (57,299) ​ (813) ​ (58,112) ​ (33,922) ​ (1,225) ​ (35,147) Non-GAAP revenue (FOB mine) ​ $ 496,531 ​ $ 11,045 ​ $ 507,576 ​ $ 242,803 ​ $ 5,444 ​ $ 248,247 Tons sold ​ 2,396 ​ 54 ​ 2,450 ​ 2,239 ​ 47 ​ 2,286 Revenue per ton sold (FOB mine) ​ $ 207 ​ $ 203 ​ $ 207 ​ $ 108 ​ $ 116 ​ $ 109 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP cash cost per ton sold.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2023 ​ Year ended December 31, 2022 ​ Company Purchased ​ ​ Company Purchased ​ ​ (In thousands, except per ton amounts) Produced Coal ​ Total Produced Coal ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 657,090 ​ $ 36,434 ​ $ 693,524 ​ $ 553,830 ​ $ 11,858 ​ $ 565,688 Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation ​ (100,174) ​ (4,723) ​ (104,897) ​ (57,299) ​ (813) ​ (58,112) Non-GAAP revenue (FOB mine) ​ $ 556,916 ​ $ 31,711 ​ $ 588,627 ​ $ 496,531 ​ $ 11,045 ​ $ 507,576 Tons sold ​ 3,299 ​ 156 ​ 3,455 ​ 2,396 ​ 54 ​ 2,450 Non-GAAP revenue per ton sold (FOB mine) ​ $ 169 ​ $ 203 ​ $ 170 ​ $ 207 ​ $ 203 ​ $ 207 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refer to coal sales information for revenue per ton sold (GAAP) calculations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP cash cost per ton sold.
Contractual Obligations The following table summarizes our significant contractual obligations at December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ ​ 2 – 3 4 – 5 More than 5 (In thousands) ​ Total 1 year years years years Minimum coal lease and royalty obligations ​ $ 27,098 ​ $ 3,339 ​ $ 6,698 ​ $ 6,027 ​ $ 11,034 Debt, excluding interest ​ ​ 128,896 ​ ​ 75,639 ​ ​ 18,757 ​ ​ 34,500 ​ ​ — Insurance financing ​ ​ 4,577 ​ ​ 4,577 ​ ​ — ​ ​ — ​ ​ — Leases ​ ​ 12,161 ​ ​ 6,463 ​ ​ 5,362 ​ ​ 336 ​ ​ — Take or pay obligations ​ 5,059 ​ 3,903 ​ 1,156 ​ — ​ — Total ​ $ 177,791 ​ $ 93,921 ​ $ 31,973 ​ $ 40,863 ​ $ 11,034 71 Table of Contents ​ Minimum royalties represent the contractual minimum amounts to be paid monthly, quarterly or annually for the right to access mineral properties and mine certain reserves and resources.
These assets will also provide the Company with a preparation facility to handle additional future production from a deep mine complex at Maben should the Company decide in the future to pursue such development. 80 Table of Contents Contractual Obligations The following table summarizes our significant contractual obligations at December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ ​ 2 – 3 4 – 5 More than 5 (In thousands) ​ Total 1 year years years years Minimum coal lease and royalty obligations ​ $ 27,195 ​ $ 3,358 ​ $ 6,486 ​ $ 6,316 ​ $ 11,035 Debt, excluding interest ​ ​ 91,383 ​ ​ 56,534 ​ ​ 34,849 ​ ​ — ​ ​ — Insurance financing ​ ​ 4,037 ​ ​ 4,037 ​ ​ — ​ ​ — ​ ​ — Leases ​ ​ 11,940 ​ ​ 6,075 ​ ​ 3,953 ​ ​ 1,912 ​ ​ — Take-or-pay obligations ​ 20,237 ​ 5,612 ​ 9,000 ​ 5,625 ​ — Total ​ $ 154,792 ​ $ 75,616 ​ $ 54,288 ​ $ 13,853 ​ $ 11,035 ​ Minimum royalties represent the contractual minimum amounts to be paid monthly, quarterly or annually for the right to access mineral properties and mine certain reserves and resources.
Net cash used for investing activities increased $86.1 million versus the prior year primarily due to $93.5 million of increased capital expenditures, or $94.6 million including the effect of capitalized interest, driven by growth projects at the Elk Creek and Berwind mining complexes to increase capacity and accommodate higher production levels.
Net cash used for investing activities during 2023 decreased $73.5 million versus the prior year primarily due to lower capital expenditures and acquisition-related activity of $40.1 million and $22.2 million, respectively. The decrease in capital expenditures was due to the Company’s progress related to strategic growth projects at our Elk Creek and Berwind mining complexes.
Interest expense, net was approximately $6.8 million in 2022 as compared to $2.6 million in 2021. The increase in net interest expense in 2022 was primarily due to debt incurred to finance acquisitions in 2022 as well as the issuance of Senior Notes in July 2021. 66 Table of Contents Income tax expense.
Interest expense, net. Interest expense, net was approximately $8.9 million in 2023 as compared to $6.8 million in 2022. The increase in net interest expense in 2023 was primarily due to increased use of the revolving credit facility during 2023. Income tax expense. We recognized income tax expense of $22.4 million and $30.2 million in 2023 and 2022, respectively.
These volumes were mostly metallurgical quality coal. Sales commitments of another 0.4 million tons were obtained subsequent to December 31, 2022.
The Company expects to satisfy approximately 88% of these commitments in 2024 and the remainder in 2025. Sales commitments of another 0.4 million tons were obtained subsequent to December 31, 2023 for delivery in 2024.
Total cost per ton sold increased 59% from $85/ton in 2021 to $136/ton in 2022. Total cash cost per ton sold (FOB mine) , which excludes transportation costs and idle mine costs related to the Berwind ignition event, increased 54% from $70/ton in 2021 to $108/ton in 2022.
Cost of sales per ton sold increased 5% from $136 per ton in 2022 to $143 per ton in 2023. Cash cost per ton sold (FOB mine), a non-GAAP measure which excludes transportation costs and idle mine costs, increased 3% from $108 per ton in 2022 to $111 per ton in 2023, including company-produced coal and purchased coal.
The Company expects the mine to achieve regular levels of production by the third quarter of 2023. ​ The increase in capacity at the Elk Creek plant and the re-opening of the Berwind No. 1 mine, as described above, as well as the expected start of production at the Maben mine are expected to increase production and earnings starting in the second quarter of 2023.
Production from the Berwind No. 1 mine restarted in the first quarter of 2023. ​ As a result of the increase in capacity at the Elk Creek plant, the re-opening of the Berwind No. 1 mine described above, and the start of production at the Maben mine during 2023, the Company was producing just under an annualized four million tons per year run rate at the later part of 2023.
Restricted cash balances at December 31, 2022 and December 31, 2021 were $0.9 million and consisted of funds held in escrow for potential future workers’ compensation claims. Restricted cash balances were included in other current assets on the consolidated balance sheets.
Restricted cash balances were included in other current assets on the consolidated balance sheets.
Changes in working capital were also favorable versus the prior year as accounts payable increased in 2022 and accounts receivable decreased slightly in 2022 despite the large increase in revenues. These changes were offset partially by the increase in inventories in 2022, which was driven by logistical and rail challenges experienced during 2022.
Working Capital Accounts receivable were $96.9 million at December 31, 2023, which increased $55.7 million versus December 31, 2022 driven by the $67.5 million increase in fourth quarter revenues. Inventories were $37.2 million at December 31, 2023, which decreased $7.8 million versus December 31, 2022 driven by the logistical and rail challenges we experienced in 2022.
The new facility also contains certain 70 Table of Contents compensating balance requirements, which include that the Company maintain an average daily cash balance of $5 million, as determined on a monthly basis, to assure future credit availability.
In addition, the Company must maintain an average daily cash balance of $5 million, as determined on a monthly basis, in a dedicated account as well as an additional $1 million in a separate dedicated account to assure future credit availability. At December 31, 2023, we were in compliance with all debt covenants under the Revolving Credit Facility.
The base rate equals the highest of the administrative agent’s prime rate, the federal funds effective rate plus 0.5%, or 3%. Liquidity As of December 31, 2022, our available liquidity was $49.1 million, comprised of $35.6 million of cash and cash equivalents and $13.5 million of availability under the Revolving Credit Facility for future borrowings.
Liquidity As of December 31, 2023, our available liquidity was $90.6 million, comprised of $42.0 million of cash and cash equivalents and $48.6 million of availability under the Revolving Credit Facility for future borrowings. Total current assets were in excess of total current liabilities, which included $42.5 million of revolver borrowings repaid in January 2024, by $19.7 million.
As of the date of this Annual Report, management believes that current cash on hand, cash flow from operations and available liquidity under our Revolving Credit Facility will be sufficient to meet its capital expenditure and operating plans.
As of the date of this Annual Report, we expect to fund our capital and liquidity requirements for the next twelve months and the reasonably foreseeable future with cash on hand, borrowings under the Revolving Credit Facility, and projected cash 79 Table of Contents flows from operations.
The $6.3 million increase in total ARO liabilities during 2022 was driven mostly by revisions to our estimate of inflation. The inflation per year assumption of 3.75% used in 2022 was higher than the assumption used in 2021 of 2.3% based on macroeconomic trends.
Our ARO liabilities at December 31, 2023 were nearly flat versus December 31, 2022 as the accretion of the liability during the year and the downward revision to estimates were mostly offsetting. We lowered our inflation per year assumption from 3.75% used in 2022 to 3% in 2023 based on macroeconomic trends.
The new facility provides greater liquidity to the Company and added flexibility to pursue our strategic growth initiatives as well as withstand potential changes in macroeconomic conditions. We expect to fund our capital and liquidity requirements with cash on hand, borrowings and credit facility discussed above, and projected cash flow from operations.
The Revolving Credit facility, which includes multiple lending parties and has a maturity date of February 15, 2026, provides added flexibility to the Company to pursue our strategic growth initiatives and manage our normal operating cash position as well as withstand potential changes in macroeconomic conditions.
Removed
Coal benchmark prices soared in early 2022, but then fell throughout the rest of the year. Uncertainty related to COVID-19 continues to linger across the world.
Added
In addition, blast furnace steelmaking is more prevalent outside the U.S. compared to domestic steel production, which creates demand for exports of metallurgical coal. Although conflicts overseas continue and economic growth remains uncertain in some regions of the world, supply constraints continue to support the global metallurgical coal market overall.
Removed
The Company actively monitors for developments and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, suppliers, and stakeholders, or as required by federal, state, or local authorities.
Added
Ongoing bans on the import of Russian coal have affected the availability of supply to certain seaborne markets as well as contributed to volatility in prices. Metallurgical coal benchmark prices increased significantly in early 2022, but then fell throughout the rest of the year. Market pricing for 2023 was generally down from 2022 levels but remains favorable versus long-term averages.
Removed
Regarding the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region. Globally, various governments have banned imports from Russia including commodities such as oil, natural gas and coal.
Added
We expect metallurgical coal prices to remain volatile in the near term. In addition, we anticipate that inflation may remain high in the near term for steel prices, freight rates, labor, and materials, which would continue to negatively affect our profitability. During 2023, we sold 3.5 million tons of coal.
Removed
These events have contributed to volatility in the commodity markets. This volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, may have a significant effect on market prices and overall demand for our coal and the cost of supplies and equipment. We are closely monitoring the potential effects on the market.
Added
The Company shifted to 71 Table of Contents more export sales in the Company’s mix of revenues during 2023, which will likely continue into 2024. Export sales often contain index-based pricing and, therefore, greater volatility in pricing and revenues. In 2023, our capital expenditures were $82.9 million, excluding capitalized interest of $1.1 million.
Removed
We have no meaningful direct financial exposure to Russia and Ukraine; however, the European Union ban on Russian coal has put upward pressure on international thermal coal prices. In addition, fear of economic contraction may affect future demand for coking coal. Values of certain indices for high quality thermal coal exceeded values of coking coal indices for part of 2022.
Added
The Company expects to produce between 4.0 million and 4.4 million tons in 2024 depending on market conditions. ​ On June 21, 2023, the Company distributed Class B common stock, a tracking stock, to provide existing holders of the Company’s common stock an opportunity to participate directly in the financial performance of the Company’s CORE assets on a stand-alone basis, separate from the Company’s metallurgical coal operations.
Removed
Available coking coal may be directed into thermal markets when such conditions occur. The annual contracting season with North American steel producers generally occurs in late-summer through the fall.
Added
CORE assets were acquired initially by the Company as part of the Company’s acquisition of Ramaco Coal in the second quarter of 2022.
Removed
This 63 Table of Contents level of pricing in 2023 is higher than the average price of $187 per ton FOB mine that was obtained during the previous contracting season for North America.
Added
The financial performance of CORE assets consists of the following non-cost-bearing revenue streams based on the Company’s current expectations: ● Royalty fees derived from the royalties associated with the Ramaco Coal and Amonate reserves, which we believe approximates 3% of Company-produced coal sales revenue excluding coal sales revenue from Knox Creek, ● Infrastructure fees based on $5.00 per ton of coal processed at our preparation plants and $2.50 per ton of loaded coal at the Company’s rail load-out facilities, and ● Future income derived, if and when realized, from advanced carbon products and rare earth elements initiatives. ​ The Company anticipates paying a quarterly cash dividend equal to 20% of the total fees above; however, any dividend amounts declared and paid are subject to the sole discretion of the Company’s Board of Directors.
Removed
Our capital expenditures in 2021 were $29.5 million, excluding cash paid for the acquisition of the Amonate assets which totaled $30.1 million. The increase in capital expenditures was due to continued investments in growth projects at our Elk Creek and Berwind mining complexes.
Added
Dividends paid on the tracking stock allow the Company to return to Class B common stockholders a portion of the savings from royalties and infrastructure usage fees resulting from the acquisition of Ramaco Coal.
Removed
We expect to complete improvements at the Elk Creek preparation plant in the second quarter of 2023, which should result in an increase in annualized processing and shipping capacity from 2 million tons to 3 million tons per year.
Added
In addition, the tracking stock provides an opportunity for Class B common stockholders to participate directly in the potential revenue growth associated with the development of carbon products and rare earth elements.

… 59 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+8 added−2 removed1 unchanged
Biggest changeInterest Rate Risk. Based on the current levels of debt and leases, we are not overly exposed to interest rate risk. Should we incur additional debt in the future or increase our cash position, the general level of interest rates will begin to take on greater importance.
Biggest changeWe are exposed to risk from changes in interest rates; however, based on the current levels of debt and leases, the Company does not attempt to manage our exposure to interest rate fluctuations. we are not overly exposed to interest rate risk.
However, because our coal is sold internationally, to the extent that the U.S. dollar strengthens against the foreign currency of a customer or potential customer, we may find our coal at a price disadvantage as compared with other non-U.S. suppliers. This could lead to our receiving lower prices or being unable to compete for that specific customer’s business.
As a result, we do not have direct exposure to currency valuation exchange rate fluctuations. However, because our coal is sold internationally, to the extent that the U.S. dollar strengthens against the foreign currency of a customer or potential customer, we may find our coal at a price disadvantage as compared with other non-U.S. suppliers.
Consequently, currency fluctuations could adversely affect the competitiveness of our coal in international markets. ​ 74 Table of Contents
This could lead to our receiving lower prices or being unable to compete for that specific customer’s business. Consequently, currency fluctuations could adversely affect the competitiveness of our coal in international markets. ​ 84 Table of Contents
Removed
Our primary product is metallurgical coal, which is in itself a commodity. Our coal is sold under short-term fixed price contracts, term transactions utilizing index pricing or on a spot basis. As such, we are exposed to changes in the international price of metallurgical coal. We attempt to manage this risk by keeping tight control over our mining costs.
Added
Our primary product is metallurgical coal, which is in itself a commodity. Sales commitments in the metallurgical coal market are typically not long-term in nature. The Company’s domestic sales contracts have terms of about one year and the pricing is typically fixed. Export sales have spot or term contracts, and pricing is often derived from an index.
Removed
At that time, we will manage our exposure through a variety of financial tools designed to minimize exposure to interest rate fluctuations. Foreign Exchange Rate Risk. International sales of coal are typically denominated in U.S. dollars. As a result, we do not have direct exposure to currency valuation exchange rate fluctuations.
Added
As such, we are exposed to changes in the international price of metallurgical coal. 83 Table of Contents Our sales commitments as of February 29, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ Volume Average Price North America, fixed priced 1.5 ​ $ 167 Seaborne, fixed priced 0.2 ​ $ 159 Total, fixed priced 1.7 ​ $ 166 Index priced 2.2 ​ ​ Total committed tons 3.9 ​ ​ ​ ​ Sales commitments of 0.4 million tons were obtained subsequent to December 31, 2023, which are included in the table above.
Added
Sales commitments in the metallurgical coal market are typically not long-term in nature and, therefore, we are subject to fluctuations in market pricing. We expect the shift to more export sales in the Company’s mix of revenue that occurred in 2023 to continue during 2024, which may lead to volatility in revenues due to index-based pricing.
Added
The Company does not currently manage this risk through the use of derivative instruments. We also have exposure to price risk for supplies that are used directly or indirectly in the normal course of production such as diesel fuel, explosives, and other items.
Added
The Company manages its risk for these items through strategic sourcing contracts in normal quantities with our suppliers. Interest Rate Risk.
Added
The Company has senior unsecured notes with a face value of $34.5 million that mature on July 30, 2026, unless redeemed prior to maturity, bearing interest at a fixed rate of 9% per annum and paid quarterly. Some of the Company’s debts may be affected by changes in benchmark interest rates, such as the Secured Overnight Financing Rate (“SOFR”).
Added
Borrowings under the Company’s Revolving Credit Facility, which has a maturity date of February 15, 2026, bear interest at either a base rate plus 1.5% or the applicable SOFR plus 2%. The base rate equals the highest of the administrative agent’s prime rate, the Federal Funds Effective Rate plus 0.5%, or 3%.
Added
The Company’s outstanding financing related to the Maben coal acquisition, which had a balance of $11.4 million at December 31, 2023 and is due in full in 2024, bears interest at the applicable SOFR plus 3% compounded monthly. Foreign Exchange Rate Risk. International sales of coal are typically denominated in U.S. dollars.

Other METC 10-K year-over-year comparisons