American Resources Corporation (NASDAQ:AREC) has announced that its subsidiary American Carbon Corporation, a leading producer of high-quality metallurgical and specialty carbon, has expanded production at its Carnegie 2 metallurgical carbon mine in Pike County, Kentucky, by adding a second operating section.
The company said production from this section is expected to initially ramp up to approximately 9,000 to 12,000 additional tons per month.
"Our McCoy Elkhorn complex is a showcase operation that possesses a significant opportunity for growth from our internal portfolio of assets,” American Resources CEO Mark Jensen said in a statement. “We applaud the hard work that the men and women on site have put forth and the effort to achieve this growth safely and efficiently and to capitalize on the strength of the metallurgical carbon market.”
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Jensen said adding a second operating section at the already-producing mine is one of the highest margin growth opportunities it can execute as a company, given no additional fixed costs and minimal additional variable costs are needed to achieve the incremental growth of production.
“Now that this has been achieved, we look forward to focusing on additional growth expansion at the McCoy Elkhorn complex, while we continue to minimize capex costs and maximize speed to market,” he added.
American Resources noted that over the years it has acquired a significant fleet of underground and surface equipment that it can utilize to expand production. It said the new expansion at Carnegie 2 is working almost entirely on owned equipment that the company has been able to acquire over the years.
The company said it is still in possession of over three additional full operating sections of equipment that it intends to use for Carnegie 1 expansion, the company's upcoming Mine #15A expansion, as well as its Wyoming County Coal LLC complex that it is currently developing.
In the current market, it said owning quality assets and equipment for efficient growth offers a significant competitive advantage, given the current tightness in the equipment and infrastructure marketplace.
American Resources has a growing portfolio of assets in the Central Appalachian basin of eastern Kentucky and southern West Virginia, where premium quality metallurgical carbon and rare earth mineral deposits are concentrated.
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