Hamilton Beach 2014 Annual Report Download - page 9

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demand and pricing for all types of coal in the
Alabama market have declined and remain weak.
Clearly this result is very disappointing to us and
to our stockholders. In addition, we now believe
regulatory changes on the immediate horizon,
including the Environmental Protection Agency’s
costly and controversial Mercury and Air Toxics
Standards regulation, which requires significant
reductions in mercury emissions from power
plants, will increase Centennial’s operating costs
without corresponding increases in coal selling
prices. These pricing, demand and regulatory
pressures led to recognition of a very substantial
non-cash impairment charge related to the
Centennial mining operations’ long-lived assets
for the fourth quarter of 2014. This non-cash
accounting charge does not impact the Company’s
cash flow from operations.
NACoal faces a very difficult situation with the
Centennial operation. Until markets improve, the
Centennial business will be managed based on
cash generation. The management team is right-
sizing operations in line with conservative volume
estimates, altering mining plans, investigating
less costly coal processing methods, managing
production volumes to optimize cash flow,
evaluating capital employed and considering sales
of non-core assets if appropriate. The Company
believes that efforts to manage the business
around conservative volume expectations and
manage for cash will help position this business
to take advantage of any rebound in the coal
market that may occur over time.
Safety and Environmental Excellence
NACoal consistently ranks among the
safest and most environmentally responsible
coal mining companies in the country. In 2014,
the Mine Safety and Health Administration
(MSHA) listed NACoal as the safest large coal
mining company in the country. Safety is at the
very core of NACoal’s culture, embedded deeply
in employee training programs, operating
procedures and best practices shared among
all of NACoal’s operations.
NACoal’s permitting, mining and reclamation
activities utilize state-of-the-art technology and a
commitment to excellence to ensure that activities
comply with, or exceed, legal requirements. Work
on the mine site is performed with the greatest
degree of care to ensure that land is returned to
a productive natural state. Frequently, NACoal
employees and their families are farmers, ranchers
and outdoorsmen who live near mining areas.
A new dragline and surface miner
were put into service in 2014 at North
American Coal’s newest mine, Caddo Creek
Resources Company, which commenced
delivering coal in late 2014.