LEXINGTON, KY — The CEO of a Kentucky-based Ramaco Development says his company has a better shot of competing in the metallurgical coal market because it enters that market with no debt.
Ramaco CEO Randall Atkins announced Tuesday plans for a $90 million investment to open two mines in southern West Virginia, employing up to 400 miners.
“We are excited about the formation of a partnership with two of the country’s most respected energy private equity investors in Energy Capital Partners, as well as Yorktown our founding sponsor,” Atkins said in a statement released by the office of Third District Congressman Evan Jenkins. “We believe this investment to be very well timed. As other metallurgical coal companies have financially struggled, we have capitalized a pure play metallurgical coal producer, with substantial low cost advantages and no debt. Our mines will be perhaps the newest in the country. Recent market strength, especially in the metallurgical markets, bodes well for our planned production beginning in 2017.”
The Elk Creek Mine is located in parts of Logan, Mingo and Wyoming counties while the Berwind Mine is in both McDowell County, W.Va. and Buchanan County, Va.
Equipment is just months away from being put into place, Jenkins said.
“The deal has been closed and we’ll be mining here in 2017,” Jenkins said. “We’re not going to have to wait long.”
Work is expected to begin first on Elk Creek’s coal prep plant.
Atkins is a Huntington native and Jenkins has known his family for years. Jenkins said he’s been talking to Atkins for more than a year about the projects. The company purchased the Elk Creek mine about four years ago and the Burwind property last year.
The price for met coal has increased to around $140 per ton recently, which is not quite half what it was per ton just a few short years ago. But Ramaco believes it can make a profit at that price, Jenkins said.
“Met coal has been taken a bump up recently, which is good news. The timing of this project coincides with an improving market,” he said.
Jenkins has talked to hundreds of laid-off coal miners since he began campaigning for the congressional seat he now holds in early 2014. He said he’s looking forward to being able to tell them something positive.
“To put literally hundreds of West Virginians back to work is excellent news and provides hope and opportunity for the future,” Jenkins said.