TORONTO (miningweekly.com) – US coal miner Alpha Natural Resources has reported lower first-quarter revenues as the coal-industry downturn continues unabated.

The Bristol, Virginia-based miner reported total revenues for the three months ended March 31 of $841-million, down 24% compared with $1.1-billion in the first quarter of 2014, while coal revenues declined to $726-million from $1.11-billion in the year-earlier period.

Alpha fingered the decline in coal revenues on lower average realisations in all regions and fewer tons sold in the East, mainly owing to weather, resulting in reduced shipments of about one-million tons and coal revenue by more than $50-million.

The company reported first quarter net income of $68-million, or $0.30 a share, compared with a net loss of $56-million, or $0.25 a share, in the previous comparable period.

"As all participants in the industry are acutely aware, we are more than two years into a prolonged coal market downturn. To mitigate the negative impacts of these market conditions on our business, we continue to take proactive steps to reduce costs, maximise efficiency and manage our balance sheet,” chairperson and CEO Kevin Crutchfield explained.

Alpha had shuttered more mines in the first quarter in an effort to adjust its cost structure and Crutchfield noted that the company expected to take further actions to improve the efficiency of the company’s mine portfolio and reduce overhead cost to achieve and, potentially, exceed its target of annualised savings in the $60-million to $75-million range when the actions had been fully implemented.

Metallurgical coal shipments in the period totalled four-million tons compared with 4.4-million tons in the first quarter of 2014. Alpha shipped ten-million tons of Powder River basin (PRB) coal, compared with 9.4-million tons in the year-earlier period. Eastern steam coal shipments were 5.5-million tons compared with 7.6-million tons.

The average realised metallurgical coal price was $76.75/t, down from $89.99/t in the first quarter last year, and the average realised price for PRB shipments was $11.55/t compared with $12.26/t a year earlier. For Eastern steam coal, Alpha reported an average realised price of $55.20/t compared with $58.25/t a year earlier.

Alpha, which had mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming that supplied metallurgical coal to the steel industry and thermal coal to generate power to customers on five continents, noted that, globally, India had exhibited strong import volumes, with March year-to-date metallurgical coal imports up more than 50%, exceeding China as the second largest importer.

However, market conditions remained very difficult, notably in the US, where steel capacity utilisation rates had declined to 72% from 77% a year ago, and in China, where gross domestic product growth had slowed to 7% in the first quarter. This was the lowest growth rate experienced by China since the first quarter of 2009 and the effects of recent stimulus were yet to take hold.

March year-to-date metallurgical Chinese coal imports declined 16% year-on-year to 10.9-million tonnes.