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Item 1.01.
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Entry into a Material Definitive Agreement.
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On July 31, 2020, SunCoke Energy, Inc. (the “Company”) announced that the Company’s Jewell Coke Company, L.P. subsidiary located in Vansant, Virginia (“Jewell”), and its Haverhill Coke Company LLC subsidiary, located in Franklin Furnace, Ohio (“Haverhill”) each have amended their respective existing agreements to supply coke to ArcelorMittal USA LLC and/or certain of its affiliates (collectively, “AMUSA”).
The Amended and Restated Coke Supply Agreement, dated as of October 28, 2003, by and between Jewell and AMUSA, as amended (the “Jewell Coke Supply Agreement”) has been amended to, among other things: (i) extend the term by five years, such that the Jewell Coke Supply Agreement will expire on December 31, 2025, instead of December 31, 2020; (ii) reduce AMUSA’s minimum coke purchase obligation and Jewell’s corresponding coke supply obligation by one hundred fifty thousand (150,000) tons on an annualized basis for the 2020 contract year; (iii) reduce AMUSA’s minimum coke purchase obligation and Jewell’s corresponding coke supply obligation by approximately three hundred thousand (300,000) tons on an annualized basis for the 2021 contract year; (iv) reduce AMUSA’s minimum coke purchase obligation and Jewell’s corresponding coke supply obligation by approximately three hundred thousand (300,000) tons on an annualized basis for the 2022 through 2025 contract years; and (iv) designate Haverhill as a potential source of production for up to an aggregate four hundred thousand (400,000) tons of the coke supply obligation on an annualized basis under the Jewell Coke Supply Agreement for the period beginning January 1, 2022 and ending December 31, 2025.
The Coke Purchase Agreement, dated as of October 28, 2003, by and between Haverhill and AMUSA, as amended (the “Haverhill Coke Purchase Agreement”) has been amended to, among other things: (i) extend the term by five years, such that the Haverhill Coke Purchase Agreement will expire on December 31, 2025, instead of December 31, 2020; (ii) reduce AMUSA’s minimum coke purchase obligation and Haverhill’s corresponding coke supply obligation by approximately one hundred thousand (100,000) tons on an annualized basis for the 2020 contract year; (iii) reduce AMUSA’s minimum coke purchase obligation and Haverhill’s corresponding coke supply obligation by approximately one hundred fifty thousand (150,000) tons on an annualized basis for the 2021 contract year; and (iv) designate Jewell as a potential source of production for up to an aggregate one hundred fifty thousand (150,000) tons of coke on an annualized basis under the Haverhill Coke Purchase Agreement in the 2021 contract year.
Giving effect to the above-described changes, the Company anticipates total aggregate coke volumes produced at Jewell and Haverhill combined to be approximately: (i) one million ten thousand (1,010,000) tons on an annualized basis for the 2020 contract year; (ii) eight hundred thousand (800,000) tons on an annualized basis for the 2021 contract year; and (iii) four hundred thousand (400,000) tons on an annualized basis for the 2022 through 2025 contract years.
The foregoing brief descriptions are qualified in their entirety by reference to the respective amendments to the Jewell Coke Supply Agreement and the Haverhill Coke Purchase Agreement, copies of which amendments will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the Third Quarter of 2020.
Some of the statements contained in this report constitute forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended), including our expectations regarding the Jewell Coke Supply Agreement and the Haverhill Coke Purchase Agreement, as amended. Such statements are based on the current knowledge, beliefs and expectations of the Company, and the Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include, but are not limited to, domestic and international economic, political, business, operational, competitive, regulatory and/or market factors affecting the Company, as well as other risks and uncertainties described in the Company’s annual and quarterly reports and current reports on Form 8-K filed with the Securities and Exchange Commission.