November 11, 2025 - US coal producer Alliance Resource Partners further reduced its sales guidance for 2025 primarily because of mining setbacks and elevated production costs at some Appalachian operations.

The company, which operates mines in Appalachia and the Illinois basin, now expects to ship around 32.5mn-33.3mn short tons (st)(29.5mn-30.2mn metric tonnes) of coal this year. The midpoint of the new guidance is about 500,000st lower than what Alliance had forecast in July.

Most of the reduction in the sales outlook is for Alliance's Appalachian coal operations, where the Mettiki mine in West Virginia is confronting geological challenges. Alliance lowered its expectations for 2025 Appalachian coal sales to 7.5mn-7.75mn st from a previous 7.75mn-8.25mn st. It also is expecting production costs for the Appalachian segment to be higher this quarter than in the third quarter of 2025, according to company chief executive Joseph Craft.

"We do believe that the Mettiki situation is tied to a specific geologic issue in the fourth quarter," Craft said. "Going forward, we do believe Appalachia is going to show very sustainable lower costs than what we've seen over the last several quarters."

Mining conditions at Alliance's Tunnel Ridge mine, which also is in West Virginia, started to improve last quarter after miners moved longwall operations to a different section of the mine in July. The company expects improvements from that mine to continue this quarter.

Alliance also tightened its Illinois basin 2025 sales outlook to 25mn-25.5mn st from the previously expected 25mn-25.75mn st. This still would be an increase from 2024's 24.8mn st of company coal sales from the basin.

Alliance expects growth in Illinois basin coal sales and production after implementing automated longwall shield and shears at the Hamilton mine in Illinois immediately following the completion of its longwall move in early-August, Craft said. The company also opened a new portal facility at the Henderson County mine in western Kentucky in August. Henderson County is an expansion of Alliance's River View mining complex. Six units are scheduled to be operating at Henderson early next year and three units will continue to run at River View, according to Craft.

During the third quarter, Alliance sold 8.7mn st of coal and produced a combined 8.4mn st, increasing by 3.9pc and 8.5pc, respectively, from a year earlier. The entire increase was from the Illinois basin, where sales climbed to 6.61mn st from 5.97mn st.

Still, the company's average sales price fell by 7.5pc to $58.78/st for all of its coal production because many higher-priced contracts finalized during the supply shortage in 2022 expired at the end of last year, chief financial officer Cary Marshall said.

Some additional higher-priced contracts for Appalachian coal are expiring at the end of this year, which could result in the company's average sales price per ton in 2026 being lower, executives said. But Alliance is expecting lower production costs and higher volumes from Appalachian mines.

Overall, a strong cooling season and "a steady stream of domestic customer solicitations for long-term supply contracts" helped Alliance to boost its contracted position for this year and for 2026 during the third quarter, Marshall said.

Last quarter, Alliance added around 500,000st to its book for 2025, bringing the volumes under contract for this year up to 32.8mn st as of 30 September. All but 3mn st of the coal under contract is being shipped to US customers.

For 2026, the company has 27.5mn st of coal under contract to sell domestically and 1.6mn st to be shipped into the export market. That is up from committed volumes of 25.3mn st and 1.3mn st recorded at the end of June.

Alliance expects its coal commitments to continue to grow beyond next year in response to projected demand from data center developments. Craft cited forecasts of up to 4pc-6pc/yr electricity demand growth in the PJM Interconnection and other markets.

In addition, "we are seeing the actual competition of gas-to-coal being less of a factor as data centers come online than what it has in the past", because the anticipated load growth would require reliable energy from all available generation sources, Craft said.