Anthracite: The cleanest burning solid fossil fuel ... - Atlantic Coal plc

Our Market is Anthracite
AIM Market (LSE) Ticker: ATC;
OTCQX Market (NYSE) Ticker: ATCLY
www.atlanticcoal.com
Anthracite: The cleanest burning solid
fossil fuel known to man
Anthracite, or ‘hard coal’, is the premium clean burning and high carbon coal.
Hard and compact, it produces cleaner, more energy efficient heat than softer
coals, and produces no smoke or soot residue when burnt. Its high carbon
(86% to 92%) and low sulphur (less than 0.7%) content makes anthracite a
sought-after carbon source in the steel and ferrous metals industry.
Anthracite is the highest quality metallurgical coal, measured by carbon and
energy content. Worldwide demand for anthracite is at historically high levels,
yet hard coal represents just 1% of world coal reserves.
Uses
Suitable for use in metallurgical,
thermal, water purification and
composite material products.
The natural high carbon and very low
volatile (gas) content of anthracite
makes it ideal for use as a premium
ultra-low volatile pulverized coal
injection (“PCI”) product that is injected
into blast furnaces during steel
production. This reduces consumption
of higher cost metallurgical coke and
improves steelmaking efficiency.
As the cleanest burning solid fuel on
the commercial market, anthracite is
the environmentally friendly thermal
coal, used at residential and
commercial sites. Anthracite’s heat
value is measured in British Thermal
Carbon Additive Process Carbon
Recarbonurization Brick Manufacture
Ladle Addition Briquet Manufacture
Open Hearth Carbide
Electric Arc Carbonaceous Filler
Slag Foaming Graphite
Silicon Carbide
Carbon Raw Material Wire Manufacture
Pot Liners (Aluminum) Glass Manufacture
Carbon Black
Reduction Carbon
Coke Manufacture Ferrous Ores
Blast Furnace Non-Ferrous Ores
Foundry Ferro Alloys
Lime Manufacture
Fuel
Heat Sintering, Pelletizing
Power and Agglomerating
Foundry Taconite and Fine Ores
Blast Furnace Non-Ferrous Ores
BOF Light Weight Aggregates
This document has been produced by Atlantic Coal Plc and is for information purposes only. August 2012

Units (BTUs). There are about 25
million btus per ton of Anthracite. This
is the equivalent of 180 gallons of home
heating oil and 260 therms of natural
gas.
Demand
Annual consumption of anthracite is in
excess of 500 million tons, about 85%
of which is produced in China and 9% in
Vietnam. The dramatic reduction of
exports from these dominant
producers, together with depletion of
reserves in other countries, has
created a supply imbalance supporting
future higher prices.
Pennsylvanian Anthracite
Production
Anthracite has been commercially
mined and prepared in the Northeast
Region of Pennsylvania for more than
150 years. Most Anthracite reserves
are found in Schuylkill, Carbon,
Northumberland, Lackawanna and
Luzerne Counties. The Anthracite
coalfields extend 50 miles east and
west and 100 miles north and south
covering approximately 484 square
miles. Current estimates show 4 to 6
billion tons of reserves of Anthracite.
Stove
Sizing
Anthracite is carefully sized into a
number of distinct products –some
applications need lumps (typically
larger than 0.4 inch/10mm diameter);
others require fines (less than 0.4 inch
diameter).
Description Size
Stove 2 7/16" x 1 5/8"
Chestnut 1 5/8 " x 13/16"
Pea 13/16" x 9/16"
Buckwheat 9/16" x 5/16"
Rice 5/16" x 3/16"
Barley 3/16" x 3/32"
Pea Buckwheat Rice
Larger sizes such as Stove and Nut are
applicable for charge carbon uses,
medium sizes like Chestnut and Pea
are useful in carbon additive situations
while the smaller sizes – Buckwheat,
Rice and Barley – are used after drying,
as foamy slag or injection carbon for
electric arc furnaces.
This document has been produced by Atlantic Coal Plc and is for information purposes only. August 2012

Pricing
Anthracite prices are set off-market for domestic sales and traditionally
trade between US$130 and US$160 per ton. Export prices are pegged to
Asia Pacific Hard Coking Coal (HCC) prices between steel producers and
coal suppliers, and have recently traded above US$200 per ton.
US$/tonne
Anthracite Lump: Export Specification for Export
Anthracite Pricing Tracks Hard Coking Price Indices
Markets and Off-take Agreements 400
450
400
350
300
250
200
150
100
50
0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
HCC contract HCC Spot Anthracite Lump Price
Asia Pacific coking coal prices: anthracite prices fall broadly in line with
Hard Coking Coal (HCC) prices.
US$/tonne
Anthracite: One Year Benchmark Indicies ($ per ton)
280
260
240
220
200
180
160
140
120
100
80
60
McCloskey NWE Steal Coal
Marker Price/US$ Per Ton
API#2
Sep Oct Nov Dec 2012 Feb Mar Apr May Jun Jul Aug
This document has been produced by Atlantic Coal Plc and is for information purposes only. August 2012
Anthracite per Tonne CFR Rotterdam (US$)
350
300
250
200
150
100
50
0
May 08
Jul 08
Sep 08
Nov 08
Jan 09
Mar 09
May 09
Jul 09
Sep 09
Nov 09
Jan 10
Mar 10
May 10
Jul 10
Sep 10
Nov 10
Jan 11
Mar 11
May 11
Jul 11
Sep 11
Nov 11
Anthracite Lump Anthracite Fines Hard Coking Coal
Jan 12
Mar 12
Seaborne anthracite demand and coking coal demand are tied to steel
production. A strong correlation exists between the two products
Sep Oct Nov Dec 2012 Feb Mar Apr May Jun Jul
60
Aug
Anththracite Lump Price Anththracite Lump Price
Anthracite lump prices generally trade at an average US$130 per ton premium to the API 1 & 2 price indeces and correlate in price movement. The price
differential is largely the result of anthracite’s market position as a premium coal product.
Anthracite Specifications and Pricing
FOB Richards Bay
Marker Price/US$ Per Ton
API#4
Grade Price
Stove $172.65
Nut $174.99
Pea $169.41
Buckwheat $167.07
Rice $169.83
Barley $165.30
Screenings $135.00
Stockton: Prices received in March 2012
450
400
350
300
250
200
150
100
50
0
280
260
240
220
200
180
160
140
120
100
Hard Coking per Tonne CFOB Queensland (US$)
US$/tonne