We are a master limited partnership formed on March 16, 2015 by our then-sponsor,
CNX Resources Corporation, to manage and further develop all of its active coal
operations in Pennsylvania. As part of the separation, all of CNX’s ownership
interest in our general partner and in us was transferred to CONSOL Energy as
our new sponsor. All amounts except per unit or per ton are displayed in thousands.
At December 31, 2017, our assets are comprised of a 25% undivided interest
in, and operational control over, the Pennsylvania Mining Complex, which consists
of three underground mines and related infrastructure that produce high-Btu
bituminous thermal coal that is sold primarily to electric utilities in the
eastern United States. We are a leading producer of high-Btu thermal coal in
the Northern Appalachian Basin and the eastern United States due to our ability
to efficiently produce and deliver large volumes of high-quality coal at competitive
prices, the strategic location of our mines, the industry experience of our
management team and our relationship with CONSOL Energy.
The Pennsylvania Mining Complex, which includes the Bailey Mine, the Enlow
Fork Mine and the Harvey Mine, has extensive high-quality coal reserves. We
mine our reserves from the Pittsburgh No. 8 Coal Seam, which is a large contiguous
formation of uniform, high-Btu thermal coal that is ideal for high productivity,
low-cost longwall operations. As of December 31, 2017, the Partnership’s
portion of the Pennsylvania Mining Complex included 183,867 tons of proven and
probable coal reserves with an average gross heat content of approximately 12,915
British thermal units (“Btu”) per pound and approximately 3.6 pounds
of sulfur dioxide per million British thermal units (“lb SO2/mmBtu”).
Based on our current production capacity, these reserves are sufficient to support
approximately 26 years of production. In addition, our reserves currently exhibit
thermoplastic behavior suitable for cokemaking and contain an average of approximately
39%-40% volatile matter (on a dry basis), which enables us, if market dynamics
are favorable, to capture greater margins from selling our coal as a crossover
product in the high-vol metallurgical market to cokemakers and steel manufacturers
who utilize modern cokemaking technologies.
The design of the Pennsylvania Mining Complex is optimized to produce large
quantities of coal on a cost-efficient basis. We are able to sustain high production
volumes at comparatively low operating costs due to, among other things, the
technologically advanced longwall mining systems, logistics infrastructure and
safety. All of our mines utilize longwall mining, which is a highly automated
underground mining technique that produces large volumes of coal at lower costs
compared to other underground mining methods. Generally, we operate five longwalls
and 15-17 continuous mining sections at the Pennsylvania Mining Complex. The
current production capacity of the Partnership’s portion of the Pennsylvania
Mining Complex’s five longwalls is 7,125 tons of coal per year. The preparation
plant is connected via conveyor belts to each of our mines and cleans and processes
up to 8,200 tons of coal per hour. Our on-site logistics infrastructure at the
preparation plant includes a dual-batch train loadout facility capable of loading
up to 9,000 tons of coal per hour and 19.3 miles of track linked to separate
Class I rail lines owned by Norfolk Southern and CSX, which enables us to simultaneously
accommodate multiple unit trains and significantly increases our efficiency
in meeting our customers’ transportation needs. Our ability to accommodate
multiple unit trains allows for the seamless transition from empty inbound trains
to fully loaded outbound trains at our facility.
On July 1, 2015, the Partnership’s common units began trading on the
New York Stock Exchange under the ticker symbol “CNXC”. On July
7, 2015, the Partnership completed the issuance of common units in connection
with the IPO, a private placement of common units with Greenlight Capital, and
entered into a $400,000 senior secured revolving credit facility. In connection
with the IPO, CNX contributed to the Partnership a 20% undivided interest in
the assets, liabilities, revenues and expenses comprising the Pennsylvania Mining
Complex.
Bailey Mine
The Bailey Mine is located in Enon, Pennsylvania. As of December 31, 2017,
the Partnership’s portion of the Bailey Mine’s assigned and accessible
reserve base contained an aggregate of 61,296 tons of clean recoverable proven
and probable coal. While operating two longwalls, the typical production capacity
of our portion of the Bailey Mine is 2,875 tons (11,500 on a 100% basis) of
coal per year. For the years ended December 31, 2017, 2016 and 2015, our portion
of the Bailey Mine produced 3,031 tons, 3,014 tons and 2,547 tons of coal, respectively.
Enlow Fork Mine
The Enlow Fork Mine is located directly north of the Bailey Mine. As of December
31, 2017, the Partnership’s portion of the Enlow Fork Mine’s assigned
and accessible reserve base contained an aggregate of 73,867 tons of clean recoverable
proven and probable coal. While operating two longwalls, the typical production
capacity of our portion of the Enlow Fork Mine is 2,875 tons (11,500 on a 100%
basis) of coal per year. For the years ended December 31, 2017, 2016 and 2015,
our portion of the Enlow Fork Mine produced 2,295 tons, 2,409 tons and 2,250
tons of coal, respectively.
Harvey Mine
The Harvey Mine is located directly east of the Bailey and Enlow Fork Mines.
As of December 31, 2017, the Partnership’s portion of the Harvey Mine’s
assigned and accessible reserve base contained an aggregate of 48,704 tons of
clean recoverable proven and probable coal. While operating one longwall, the
typical production capacity of our portion of the Harvey Mine is 1,375 tons
(5,500 on a 100% basis) of coal per year. For the years ended December 31, 2017,
2016 and 2015, our portion of the Harvey Mine produced 1,201 tons, 743 tons
and 901 tons of coal, respectively. Longwall production commenced in March 2014.
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