As global interest in renewable energy sources has grown, coal production has declined. Although coal has been a traditional producer of electricity and continues to produce about 20% of the world’s electricity, that’s not its only use. Brookwood-based Warrior Met Coal Inc. (NYSE: HCC) produces metallurgical coal used for steelmaking. The coal mined by Warrior Met is used as a critical component of steel production by metal manufacturers in Europe, South America and Asia.
Warrior Met recently has opened a third mine, Blue Creek, in Fayette County, and is also investing millions to facilitate the option of railcar transportation between its Blue Creek Coal reserves and its longwall mines in northern Tuscaloosa County.
“The Blue Creek project is the future for Warrior Met Coal,” says D’Andre Wright, vice president, external affairs and communications. “The project has a 40-year mine life, allowing the company to continue employing coal miners in West Alabama for the next four decades.”
Expanding Operations
Since 2016, Warrior Met has been mining in two active mines that have the capacity to produce 8 million short tons of metallurgical coal per year, Wright explains. With the Blue Creek project, the company will add a third mine. Blue Creek is one of the last remaining, untapped premium HVA reserves in the United States with an approximate 40-year mine life and a high-volume, low-cost, longwall mining operation that is expected to drive adjusted earnings before expenses of more than 50% across the cycle.
The Blue Creek project produces coal with low sulfur and strong coking properties, which makes it ideal for steel production. The Blue Creek operation began producing continuous miner coal during the third quarter of 2024, Wright says. The longwall, which will mine the majority of the coal, will be operational no later than the second quarter of 2026.
When fully operational, Warrior will employ more than 300 workers at the Blue Creek mine. That will be in addition to the company’s current employment of more than 1,300 workers.
“Blue Creek is a transformational project for Warrior, the state of Alabama and the metallurgical coal industry,” Wright says. “The project will increase Warrior’s nameplate capacity by 75% from 8 million short tons to 14 million short tons, which will be shipped primarily through the Port of Mobile.”
Over time, the Blue Creek mine is expected to generate approximately $1.3 billion of incremental revenues, $735 million of incremental adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), and $637 million of incremental free cash flows annually, according to the company.
Adding Infrastructure
A key component of completing the Blue Creek mine project is the transportation infrastructure to get coal between the new mine and the company’s existing mines in northern Tuscaloosa County, as well as south to Mobile for shipping to global customers. Over the past few years, Warrior Met has invested $154 million to build a rail loadout and overland belt to facilitate that transportation.
“The rail loadout is completed and has begun shipping coal to McDuffie Coal Terminal at the Port of Mobile as of April 2025,” Wright says. “The overland conveyor belt is scheduled to be operational in the fourth quarter of 2025.”
Robust Earnings
For the first quarter of 2025, Warrior Met reported a 10% increase in total production volumes, primarily as a result of the Blue Creek growth project, along with a 2% increase in sales volumes. Despite weak economic conditions and low market pricing, the company leveraged a variable cost model to tightly manage costs in the current pricing environment, with cash cost of sales per short ton decreasing to $112.35 from $133.48 during the first quarter of 2024.
The company produced 251,000 short tons from continuous miner development on the first longwall panel at the Blue Creek project during the first quarter of 2025. It also continued to make significant progress on the development of Blue Creek, with the longwall startup expected by the second quarter of 2026.
Finally, Warrior Met reported a record $10.9 million in cash from operating activities during the first quarter, despite an index price that decreased 9% from the fourth quarter of 2024 and 40% from the first quarter 2025.
Despite a difficult market in the early part of the year, the coal industry has been resilient. For example, in 2023, coal stocks collectively gained about 40%, “thanks to a renewed focus on metallurgical coal, which experts agree will continue to experience robust demand going forward, driven by an increase in the demand for steel,” according to The Capital Gains Report.
As Warrior Met expands its capacity, the company is playing an important role in building Alabama infrastructure, employing Alabama workers and boosting the state’s export business.
“Our decision to begin this transformational investment in Blue Creek will transform Warrior and allow us to continue our proven track record of creating value for stockholders,” Walt Scheller, CEO of Warrior, said in a statement to investors.
“This project represents a transformative opportunity for Warrior through the significant addition of nameplate capacity to address the market dynamics we believe will continue to play out over the near and medium-term. By furthering Warrior’s legacy of high-quality, low-cost assets, we believe that Blue Creek will have a positive impact on Warrior for decades to come and will benefit a wide range of stakeholders. I want to thank our employees and the rest of the project team for their dedication to this project and for ensuring the project is completed safely, on time and on budget.”
Nancy Mann Jackson is a Madison-based freelance contributor to Business Alabama.
This article appears in the August 2025 issue of Business Alabama.
