Corporate strategy

Bens Creek Group plc is a holding company that owns and operates the Ben’s Creek mining project in West Virginia, USA. The Company is designed to provide its shareholders with exposure to the metallurgical coal market, the underlying commodity. A key component of the Company’s success will be the metallurgical coal price. The Company may seek to make further acquisitions of metallurgical coal mines in North America.

Metallurgical coal industry background

Overview of the metallurgical coal industry

Metallurgical coal is a critical component in the steel production process. Steel is one of the most widely used building materials globally, and is used primarily in construction, transport, and household appliances. Most metallurgical coal in the United States is produced in the Appalachian Basin in the states of Alabama, West Virginia, and Virginia.

Metallurgical coal is further grouped in to four categories: hard coking coal (HCC), pulverized coal for injection (PCI), High Vol A (HVA) and High Vol B (HVB) coals. These categories apply to the different quality grades of metallurgical coal, which are priced daily by Platts Daily Metallurgical Coal Assessments. Various specifications affect the price of each type of coal, including volatility, strength, fluidity, swell and ash content. Metallurgical coal is a form of hard bituminous coal, which is distinct from softer bituminous and non-bituminous forms of coal that are used to generate electricity (i.e., thermal coal). Pricing for metallurgical coal has historically been significantly higher than for that of thermal coal.

High quality metallurgical coal is a scarce commodity with large scale mineable deposits limited to geographic regions in the Eastern United States, Western Canada, Eastern Australia, Russia, China, Mozambique, and Mongolia.

Most metallurgical coal in the United States is produced in the Appalachian Basin in the States of Alabama, Pennsylvania, West Virginia, and Virginia. The United States exported a total of over 55 million short tonnes of metallurgical coal to more than 37 countries around the world in 2017 (U.S. Energy Information Administration, 2018) and was ranked sixth in the world (after Australia, Indonesia, Russia, Colombia, and South Africa) in metallurgical coal exports, and third in production (behind China and India) in 2016 (International Energy Agency, 2017).

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