Alpha Metallurgical Resources, Inc. (NYSE:AMR) Q3 2023 Earnings Call Transcript

Getting back to DTA. Yes, I think your message is correct. And again, let me be clear, DTA has not approved this budget yet for 2024. So there’s still some movement that could happen there. This is kind of what Alphas estimate of what’s going on what will need to be spent in in concert with the DTA leadership and what they have, the engineering they’ve been working through. So I think quantum wise is definitely that zip code, but we’ll have to as we get further into the process, we’ll see more specifically and precision is not what we’re going for. But I think accuracy is probably in line with that.

Lucas Pipes : Thank you, Andy. And for the avoidance of doubt that $150 million would be kind of separate from the capital needs that you just discussed.

Andy Eidson: That’s right.

Lucas Pipes: In addition to rather.

Andy Eidson: Yes, it’s quote, unquote, CapEx, but because it goes through our equity, earnings and JV, it’s a separate line out. And so we try to keep gardens and actual reported numbers on a similar basis. So we don’t confuse buckets.

Lucas Pipes: Perfect. And that guidance of $40 to $50 million for capital contribution to affiliates. That just really includes the OpEx that you pay year in year out as you ship through the terminal, right?

Andy Eidson: That’s correct. And that’s just been that’s a standard thing that’s been in the numbers, since we’ve been in DTA. It’s always a challenge trying to get that presented in a way that makes it more apparent to the public. But I think we’ve, we’ve got a pretty good handle on it now as far as how we’re disclosing it.

Lucas Pipes: Very clear. I really appreciate all the color and Andy to you and team. Best of luck.

Andy Eidson: Thank you, Lucas.

Operator: [Operator Instructions] Our next question comes from Nathan Martin with Benchmark Company. Please proceed with your question.

Nathan Martin: Thanks, operator. Good morning, guys. And thanks for taking my questions. Maybe just one more on DTA. The money you guys are going be spending over the next several years. Is that mainly just to refurbish? Or is there also an opportunity there to kind of improve operations or throughput capacity?

Dan Horn: Yes. How’s that for an answer Nate? So you start with a nameplate capacity, while we’re talking about wouldn’t necessarily increase true capacity, but thinking of it more from capacity that’s been lost by the various mechanical interruptions and issues over the past couple of years. That’s how we’re thinking of it. Because it’s simply not, it’s not able to run at its at its potential right now. So the money spent, while it’s not expanding, nameplate capacity, I think it will allow us to recover some capacity that has been lost over the past couple of years, just because of the different issues that have come on.

Nathan Martin: Can you put numbers around that, Andy? Like remind me what nameplate is, and maybe kind of where you are today then?

Andy Eidson: Well, I hate to I can’t throw numbers at it again, because we don’t have the plans completely nailed down. We do have several processes we have to work through on how we’re exactly approaching it. And also, it varies depending on how stockpiles are utilized, whether you’re just pushing coal out straight out of rail cars into a boat, whether you’re, any whether you got any kind of deviation between med or thermal coal. So there are a lot of variables go into play as to what the true throughput capacity could be. But suffice it to say, getting all the pieces refurb and repaired will make it run much more effectively and efficiently than it currently is.

Nathan Martin: Got it. Okay, that’s fair. And maybe just one other question on the near term. I think Andy, you mentioned in your prepared remarks. The expectation of carryover, some funds into 2024. So, how should we think about fourth quarter med coal shipments, maybe at least directionally from the third quarter? Or maybe another way to look at it? What kind of gets you guys to the high end or the low end for your guidance?