Arch Coal changes name to Arch Resources
(Posted on 06/05/20)
Arch Coal, Inc. has announced that it is changing its name to Arch Resources, Inc., effective May 15, 2020. The name change underscores the company's ongoing transition to a premier producer of metallurgical products for the global steel industry. Arch is the second-largest supplier of coal in the United States.
"The name change we are announcing today reinforces Arch's strong and sustained pivot towards metallurgical markets and the global steel value chain, which we believe offer superior long-term return opportunities for our shareholders," said John W. Eaves, Arch's executive chair. "We have made tremendous progress in executing a fundamental shift in the company's strategic focus, and the new name will better reflect the value proposition and growth potential of our business going forward."
"The name change highlights Arch's intensifying focus on our metallurgical franchise and our steel-producing customer base," said Paul A. Lang, Arch's chief executive officer and president. "Arch produces some of the world's highest quality metallurgical products for the global marketplace, and the startup of our world class Leer South metallurgical mine in 2021 will deliver another step change advance in our shift towards metallurgical markets. Arch is moving forward with clear strategic priorities and is well-positioned for growth and success as a leading producer of metallurgical products for the steelmaking industry."
The startup of the Leer South longwall mine will solidify Arch's position as the world's leading producer of premium High-Vol A metallurgical products. Arch currently derives 70 percent of its normalized operating cash flow from its metallurgical segment, and expects that percentage to grow appreciably over time. The company is directing more than 90 percent of its capital budget to its metallurgical portfolio in 2020.
In its legacy thermal business segments, Arch remains focused on generating free cash flow. Since October 2016, Arch's thermal segments have generated nearly $700 million in adjusted EBITDA1 while expending just $100 million in maintenance capital. "We believe this systematic monetization of our thermal assets is the most value-creating and responsible path forward for our shareholders," Lang said.
"In combination with iron ore, our metallurgical products are indispensable in the primary production of steel," Lang continued. "We expect primary steel to play an essential role in the revitalization of the global economy as it recovers from the current disruption – and an equally critical role in the construction of a new economy supported by mass transit systems, wind turbines and electric vehicles."
At the time of the name change on May 15, 2020, Arch plans to launch a new corporate website highlighting its steel-focused value proposition. The new website will include a robust discussion of the company's commitment to environmental, social and governance principles. The company's NYSE ticker symbol will remain ARCH.
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