CNX.WI CONSOL Energy, Inc.

An Appalachian coal mining company that has yet to produce any coal is preparing the industry's first initial public offering in more than a year, at a time when coal prices have been rebounding sharply.

Ramaco LLC, based in Lexington, Ky., is looking to list shares early next year, according to people familiar with the matter. It is actively working with bankers and lawyers on a confidential IPO filing, these people said.

It isn't clear how the IPO would value the company, or even if the entire company would be part of the IPO. Companies can file confidentially for IPOs on U.S. exchanges if they generate less than $1 billion in annual revenue.

A Ramaco executive told S&P Global Platts in April that the company was delaying plans to start producing this year unless there was a market recovery. The company's mines show no history of producing under Ramaco ownership, according to S&P Global Platts and Wood Mackenzie.

The coal industry had been stuck in what some thought was a terminal downturn. Governments want to cut coal consumption to reduce greenhouse gases and pollution, while a boom in natural-gas drilling lowered prices of coal's primary competitor. Overproduction amid tepid global growth also created a glut for the type of coal used in steelmaking.

But recently mines in China and Australia have throttled back their output, pinching global supply and helping spark the biggest rally in global coal since 2011. U.S. prices for metallurgical coal, the type used in steelmaking that Ramaco plans to mine, have doubled since August to $212 a metric ton as of Wednesday, according to S&P Global Platts.

Now, higher prices are changing the outlook for troubled coal companies world-wide, especially several of the largest U.S. mining companies that have spent parts of the last year in bankruptcy.

A first-quarter offering would make Ramaco the first coal IPO in about 18 months and place it among a small but growing group of energy companies looking to go public amid a broad recovery in commodity prices.

Extraction Oil & Gas Inc., a Denver-based exploration and production company, became the first U.S. oil and gas company to go public in more than two years when it sold 33.3 million shares at $19 apiece this month. The shares on Friday were down 0.3% at $22.

Ramaco has coal reserves in Appalachia and Wyoming and could spin off only some of those assets into a publicly traded company. Consol Energy Inc. made a similar move a year ago, spinning off just its operations for mining the type of coal that feeds power plants.

Ramaco's owners include Yorktown Partners LLC and Energy Capital Partners. They put in a combined $90 million of equity into the company in August. It was the third Ramaco investment from Yorktown.

Ryan Dezember and Maureen Farrell contributed to this article

Write to Timothy Puko at tim.puko@wsj.com

(END) Dow Jones Newswires

October 28, 2016 12:15 ET (16:15 GMT)

CONSOL Energy, Inc. (NYSE:CNX.WI)
Historical Stock Chart
From Mar 2024 to Apr 2024

CONSOL Energy, Inc. (NYSE:CNX.WI)
Historical Stock Chart
From Apr 2023 to Apr 2024