Consol Energy to Merge with Arch Resources

Consol Energy Inc., which has been mining coal in the Appalachian region since 1864, will be getting a new name after a recently announced merger with Arch Resources Inc.

The newly named Core Resources Inc. will continue to operate from Consol headquarters in Canonsburg, Pa., and the all-stock merger will create one of the largest coal producers in the U.S., valued at about $5.2 billion.

The combined company will own 11 mines, including the Pennsylvania Mining Complex, the largest underground mining operation in North America that includes Bailey, Enlow Fork, and Harvey mines in Washington and Greene counties. It will also own Consol’s Marine Terminal in Baltimore, which gives it the ability to export about 20 million tons of coal per year, as well part of an export terminal in Virginia.

Arch Resources operates four mines in northern and southern West Virginia and three in Colorado and Wyoming that primarily produce metallurgical coal, also known as coking coal, which is a raw material in steelmaking. Consol’s mines produce thermal coal, used for electric generation, as well as some metallurgical coal.

The release announcing the merger highlights the fact that it creates a diversified coal producer serving global steel, industrial, and power generation customers, and will create a leading coal export business capable of shipping about 25 million tons per year overseas.

As the amount of coal used in the U.S. for electric production has dropped dramatically over the last decade, coal producers have increasingly looked to overseas markets. The U.S. Energy Information Agency reported that coal’s share of use at power plants fell below 20% in 2023, as cheaper natural gas-fired power plants and an increasing amount of renewables take its place. U.S. coal use has fallen from about 2.8 million tons a day in 2008 to about 1.1 million tons a day this year, which represents a 62% decrease.

More stringent regulations on emissions from coal fired-power plants and cheaper fuel alternatives have led to the drop in use, and the retirement of a number of coal-fired plants. Meanwhile, growing economies in several Asian countries, including China and India, have an increased demand for coal.

About 60% of Consol’s coal is now shipped overseas, and the new Core Resources is looking to build on that. Among the noted strategic benefits of the merger are that it “expands North American logistics and export capabilities to serve (a) growing global customer base.”

The merger appears to position the companies for the future in the face of declining domestic coal use, but increased demand in other countries.