Arch Resources, Inc.

Arch did not provide a full set of reported quarterly financial hard numbers in the transcript, but management did say Q3 coking coal shipments were reduced by approximately 200,000 tons due to the Curtis Bay shiploader outage. The company also declared a $0.25 per share fixed dividend for a total payment of $4.6 million payable on November 26. On the operating side, management said the quarter was hurt by throttled met longwalls and slightly higher normal operating costs, while thermal results improved. For outlook, management declined to give updated formal guidance because of the pending merger, but said Q4 met volumes should be similar to Q3 in broad terms, Leer South should restart later this week, Leer should follow a couple of days later, and both mines should improve after the ongoing moves. They also said 2025 should benefit from lower West Elk realizations roll-off, lower B-Seam costs as development completes, and better PRB execution, with merger synergies of $110 million to $140 million annually expected after close.

Paul Lang framed the quarter as a turning point for Arch, emphasizing two major transitions: the pending CONSOL merger and the move of both met longwalls into better geology. He said Q3 was difficult, but expects a positive step change in execution once the longwall moves are completed, and he described the company’s operating teams as having navigated a challenging period well. On markets, he said coking coal supply and demand look closer to balance than prices imply and that even modest macro improvement could lift the market quickly.

Deck Slone focused on the merger mechanics and the financial implications of the operational changes. He said the company has now secured HSR clearance and the needed international antitrust approvals, and reiterated expected annual cost savings and synergies of $110 million to $140 million once the deal closes. On operations, he highlighted that West Elk’s legacy industrial contracts are rolling off at about $40 on average and are being replaced by prices as much as $30 higher, while PRB pricing for 2025 remains in the low $40s, about $15 above current levels, due to careful customer management. He also said Leer South’s move to District 2 should improve yields and lower costs, and that no detailed updated guidance would be given before the merger closes.

Analysts pressed on 2025 contract pricing, especially for North American met coal, PRB, West Elk, and High-Vol A realizations. Management said North American met exposure could be much lower in 2025 than it was six years ago, with only about 0.5 million tons committed at just under $150, and said West Elk should benefit as legacy ~$40 contracts expire and are replaced at much higher prices. On High-Vol A, they said the market is soft but not far from balance, that they are not having to discount to move tons, and that Asian demand remains strong. Analysts also asked about Q4 volumes and whether supply pressure is building in Appalachia; management said Q4 should still reflect a difficult Q3-like environment, but they are seeing signs of slower supply growth, weaker labor pressure, better parts availability, and smaller mines dropping off line.