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Alabama’s Warrior Met Coal announces historic Blue Creek mine development

Brookwood-based Warrior Met Coal on Wednesday announced that they will begin development on a new “world-class” longwall mine near its existing mines located on the Blue Creek reserves in West Alabama.

Met coal is the type of coal sometimes referred to as coking coal. Unlike the thermal or steam variety, met coal is used as a vital ingredient in the steelmaking process instead of being utilized for power generation.

The new Blue Creek development is expected to have the capacity to produce an average of 4.3 million short tons per annum of premium High-Vol A met coal over the first ten years of production. It is one of the last remaining large-scale untapped premium High Vol A met coal mines in the U.S.

“We are extremely excited about our organic growth project that will transform Warrior and allow us to build upon our proven track record of creating value for stockholders. Blue Creek is truly a world-class asset and our commitment to this new initiative demonstrates our continued highly focused business strategy as a premium pure-play met coal producer,” Walt Scheller, CEO of Warrior Met Coal, said in a statement.

The company expects to invest approximately $550 to $600 million over the next five years to develop Blue Creek with expected spending this year alone of approximately $25 million to kickstart the project.

Based on the current schedule, Warrior Met Coal expects first development tons from continuous miner units to occur in the third quarter of 2023 with the longwall scheduled to start up in the second quarter of 2025.

The company trades on the New York Stock Exchange and as such must report specific financial details on the project. This included the company projecting a “net present value” of “greater than $1 billion over the life of the mine with a projected after-tax internal rate of return (IRR) of nearly 30% and an expected payback of approximately two years from initial longwall production.”

Warrior Met Coal previewed this project at a Yellowhammer News event in 2019.

RELATED: Study: Alabama coal industry has nearly $3 billion impact; met coal reserves to last centuries

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn