Alliance Resource Partners, L.P., a diversified natural resource company, generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in strategic producing regions across the United States.
The primary focus of the company’s business is to maximize the value of its existing mineral assets, both in the production of coal from its mini...
Alliance Resource Partners, L.P., a diversified natural resource company, generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in strategic producing regions across the United States.
The primary focus of the company’s business is to maximize the value of its existing mineral assets, both in the production of coal from its mining assets and the leasing and development of its coal and oil & gas mineral ownership. The company’s strategy is to provide its customers with reliable, baseload fuel for electricity generation to meet load expectations. In addition, the company continues to position itself as a reliable energy provider for the future, as it pursues opportunities that support the growth and development of energy and related infrastructure. The company intends to pursue strategic investments that leverage its core competencies and relationships with electric utilities, industrial customers, and federal and state governments.
The company is a coal producer in the eastern United States, with seven operating underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia, as well as a coal-loading terminal in Indiana on the Ohio River. The company markets its coal production to major domestic and international utilities and industrial users.
The company owns mineral and royalty interests in approximately 70,000 net royalty acres, including approximately 4,000 net royalty acres attributable to its equity interest in AllDale III, in premier oil & gas producing regions in the United States, primarily the Permian, Anadarko, and Williston Basins. While the company owns both oil & gas mineral and royalty interests, it refers to them collectively as mineral interests throughout its discussions of its business, as the majority of its holdings are mineral interests. The company markets its oil & gas mineral interests for lease to operators in those regions and generates royalty income from the leasing and development of those mineral interests.
The company holds coal mineral reserves and resources in Illinois, Indiana, Kentucky, Pennsylvania, and West Virginia. Substantially all of the company’s coal mineral resources and a majority of its coal mineral reserves are owned or leased by Alliance Resource Properties, which are leased or subleased to internal mining complexes or near other internal and external coal mining operations but not yet leased. The company generates royalty income from the leasing and development of its coal mineral reserves and resources.
The company also has other growth investments, such as its technology company, Matrix Group, which develops and markets industrial, mining, and technology products and services worldwide, and Bitiki, which mines bitcoin to monetize already paid-for, yet underutilized, electricity load. The company has also invested in energy and infrastructure opportunities, including Ascend, Francis, Infinitum, and NGP ET IV.
Joint Development Agreement
On January 16, 2024, Matrix Design entered into an agreement with Infinitum to jointly develop and distribute high-efficiency motors and advanced motor controllers designed specifically for the mining industry.
Acquisition Agreement
During 2024, the company was party to a collaborative agreement with a third party for the acquisition of oil & gas mineral interests in the Midland and Delaware Basins.
Coal Mining Operations
The company produces bituminous coal from its underground mines that is sold to customers principally for electric power generation (thermal) and the production of steel (metallurgical). The company has established long-term relationships with its customers through exemplary and consistent performance.
The company produces a diverse range of thermal and metallurgical coal with varying sulfur and heat contents, which enables it to satisfy the broad range of specifications required by its customers. In 2024, the company sold 33.3 million tons of coal and produced 32.2 million tons.
Illinois Basin Operations
The company’s Illinois Basin mining operations are located in western Kentucky, southern Illinois, and southern Indiana.
Gibson Complex
The company operates the Gibson South mine, located near the city of Princeton in Gibson County, Indiana. The Gibson South mine is an underground mine that utilizes continuous mining units employing room-and-pillar mining techniques to produce low/medium-sulfur coal. The Gibson South mine’s preparation plant has throughput capacity of 1,800 tons of raw coal per hour. Production from the Gibson South mine is shipped by truck or transported by rail on the CSX or NS railroads from its rail loadout facility directly to customers or various transloading facilities, including its Mt. Vernon transloading facility, for barge delivery. Production from the mine began in April 2014. Gibson coal production in 2024 was 5.7 million tons.
River View Complex
The company operates the River View mine and the Henderson County mine. The River View mine is located in Union County, Kentucky, and is currently the largest room-and-pillar coal mine in the United States. The River View mine began production in 2009 and utilizes continuous mining units to produce medium/high-sulfur coal from the No. 9 seam. The Henderson County mine, located in Henderson County, Kentucky, began full production in 2024 and utilizes continuous mining units to produce medium/high-sulfur coal from the No. 9 seam.
Both mines utilize the existing preparation plant, refuse disposal, and loadout facilities. River View’s preparation plant has throughput capacity of 2,700 tons of raw coal per hour. Coal produced from the River View complex is transported by overland belt to a barge loading facility on the Ohio River. River View complex coal production in 2024 was 9.3 million tons.
Hamilton Complex
The company operates the Hamilton mine, located near the city of McLeansboro in Hamilton County, Illinois. The Hamilton mine is an underground longwall mining operation producing medium/high-sulfur coal. Longwall mining began in October 2014, and the company acquired complete ownership and control in 2015. Hamilton's preparation plant has throughput capacity of 2,000 tons of raw coal per hour. Hamilton’s production is shipped via the CSX, Evansville Western Railway, or NS rail directly to customers or various transloading facilities, including the company’s Mt. Vernon transloading facility, for barge deliveries. Hamilton coal production in 2024 was 4.8 million tons.
Warrior Complex
The company operates an underground mining complex located near the city of Madisonville in Hopkins County, Kentucky. The Warrior complex was opened in 1985, and the company acquired it in February 2003. Warrior utilizes continuous mining units employing room-and-pillar mining techniques to produce medium/high-sulfur coal. Warrior’s preparation plant has throughput capacity of 1,200 tons of raw coal per hour. Warrior’s production is shipped via the CSX or PAL railroads or by truck directly to customers or potentially to various transloading facilities, including its Mt. Vernon transloading facility, for barge deliveries. Warrior coal production in 2024 was 4.4 million tons.
Mt. Vernon Transfer Terminal, LLC
The company leases land and operates a coal-loading terminal on the Ohio River at Mt. Vernon, Indiana. Coal is delivered to Mt. Vernon by both rail and truck. The terminal has a capacity of 8.0 million tons per year, with existing ground storage of approximately 200,000 tons. In 2024, the terminal loaded approximately 3.8 million tons for customers of Gibson and Hamilton.
Appalachian Operations
The company’s Appalachian mining operations are located in eastern Kentucky, western Maryland, western Pennsylvania, and northern West Virginia.
Tunnel Ridge Complex
The company operates the Tunnel Ridge mine, an underground longwall mine in the Pittsburgh No. 8 coal seam, located near the city of Wheeling, West Virginia. Longwall mining operations began at Tunnel Ridge in May 2012. The Tunnel Ridge preparation plant has throughput capacity of 2,000 tons of raw coal per hour. Coal produced from the Tunnel Ridge mine is medium/high-sulfur coal and is transported by conveyor belt to a barge loading facility on the Ohio River. Tunnel Ridge also has the ability, through a third-party facility, to transload coal from barges for rail shipment on the Wheeling and Lake Erie Railway, with connections to the CSX and the NS railroads. Tunnel Ridge coal production in 2024 was 6.0 million tons.
Mettiki Complex
The company operates the Mountain View mine located in Tucker County, West Virginia, and a preparation plant located near the city of Oakland in Garrett County, Maryland. Mettiki (WV) began longwall mining in November 2006. The Mountain View mine produces low/medium-sulfur coal, which is transported by truck to the Mettiki (MD) preparation plant for processing for shipment into the metallurgical or thermal coal markets. The Mettiki (MD) preparation plant has throughput capacity of 1,350 tons of raw coal per hour. Coal processed at the preparation plant can be trucked to the blending facility at the Virginia Electric and Power Company, Mt. Storm Power Station, or shipped via the CSX railroad, which provides the opportunity to ship into the domestic and international metallurgical and thermal coal markets. Mettiki (WV) coal production in 2024 was 1.1 million tons.
MC Mining Complex
MC Mining is located near the city of Pikeville in Pike County, Kentucky. MC Mining, through the company’s subsidiary Excel, operates the Excel Mine No. 5. The company acquired the original mine in 1989, and Excel completed the development of Mine No. 5 in May 2020. The underground operation utilizes continuous mining units employing room-and-pillar mining techniques to produce low-sulfur coal. The existing preparation plant, which has throughput capacity of 1,000 tons of raw coal per hour, is utilized by Mine No. 5. Substantially all the coal produced at MC Mining in 2024 met or exceeded the compliance requirements of Phase II of the CAA. Coal produced from MC Mining can be shipped via the CSX railroad directly to customers or various transloading facilities on the Ohio River for barge deliveries, or by truck directly to customers or various docks on the Big Sandy River for barge deliveries. MC Mining coal production in 2024 was 0.9 million tons.
Coal Marketing and Sales
The company sells coal to an established customer base through existing business relationships or through formal bidding processes. As is customary in the coal industry, the company has entered into long-term coal supply agreements with many of its customers. These arrangements are mutually beneficial to the company’s customers and the company, as they provide greater predictability of sales volumes and sales prices. Although some utility customers have appeared to favor a shorter-term contracting strategy, during 2024, approximately 83.6% and 87.7% of its sales tonnage and total coal sales, respectively, were sold under long-term contracts with committed term expirations ranging from 2025 to 2030. The contractual time commitments for customers to nominate future purchase volumes under these contracts are typically sufficient to allow the company to balance its sales commitments with prospective production capacity.
Reliance on Major Customers
In 2024, the company derived more than 10% of its total revenue from each of American Electric Power Company Inc., Louisville Gas and Electric Company, and Tennessee Valley Authority.
Coal Competition
The company’s principal competitors include American Consolidated Natural Resources Inc., Core Natural Resources, Inc., Alpha Metallurgical Resources, Inc., Foresight Energy LP, and Peabody Energy Corporation. The company also competes directly with smaller producers in the Illinois Basin and Appalachian regions.
Mineral Interest Activities
The company’s mineral interest activities include both oil & gas and coal mineral interests. The company’s oil & gas mineral interest business includes all activities related to the oil & gas mineral interests held directly or indirectly by Alliance Minerals and includes Alliance Minerals’ equity interest in AllDale III. The company’s mineral interests are primarily located on private lands in three basins, which are also its areas of focus for future development by operators. These include the Permian (Delaware and Midland), Anadarko (SCOOP/STACK), and Williston (Bakken) Basins. The company’s developed and undeveloped net acres standardized to a 1/8th royalty equate to 70,036 oil & gas net royalty acres, including 3,964 oil & gas net royalty acres owned through its equity interest in AllDale III.
The company’s coal mineral interests include substantially all of its coal mineral resources and the majority of its coal mineral reserves, which are owned or leased by Alliance Resource Properties and are leased or subleased to internal mining complexes or near other internal and external coal mining operations but not yet leased. The company’s coal mineral interests are located in both the Illinois Basin and the Appalachia Basin.
Permian Basin—Delaware and Midland Basins
The Permian Basin ranges from West Texas into southeastern New Mexico and is currently the most active area for horizontal drilling in the United States. The Permian Basin is further subdivided into the Delaware Basin in the west and the Midland Basin in the east. Based on geologic data and the ongoing development by operators, the company’s mineral interests in the Permian Basin contain multiple producing zones of economic horizontal development, including but not limited to the Wolfcamp, Spraberry, and Bone Spring formations.
Anadarko Basin—SCOOP and STACK Plays
The SCOOP play (South Central Oklahoma Oil Province) is located in central Oklahoma in Grady, Garvin, Stephens, and McClain Counties. Based on geologic data and the ongoing development by operators, the company’s mineral interests in the SCOOP play contain multiple producing zones of economic horizontal development, including multiple Woodford benches and the Springer Shale. In addition, operators are also currently testing other formations in the area, including the Sycamore, Caney, and Osage, which is also referred to as SCORE (Sycamore Caney Osage Resource Expansion). The STACK play (derived from Sooner Trend, Anadarko Basin, Canadian, and Kingfisher Counties) is located in central Oklahoma in Kingfisher, Canadian, Caddo, and Blaine Counties. Based on geologic data and the ongoing development by operators, the company’s mineral interests in the STACK play contain multiple producing zones of economic horizontal development, including but not limited to the Meramec and Woodford formations.
Williston Basin—Bakken
The Williston Basin stretches from western North Dakota into eastern Montana. Based on geologic data and ongoing development by operators, the company’s mineral interests contain multiple producing zones of economic horizontal development, including the Bakken and Three Forks formations.
Other
The company’s other interests consist primarily of mineral interests owned in the Appalachia Basin that stretches throughout most of Ohio, West Virginia, and Pennsylvania, and extends into other states. The Appalachia Basin’s most active plays in which the company has acreage are the Marcellus Shale and Utica plays, which cover most of Pennsylvania, northern West Virginia, and eastern Ohio. In addition to the interests held in the Appalachia Basin, the company owns a small number of mineral interests in the Tuscaloosa Marine Shale play in Mississippi. AllDale III also owns mineral interests in the Haynesville Shale formation located in northwest Louisiana.
Oil & Gas Minerals Interest - Seasonal Nature of Business
Generally, demand for oil increases during the summer months and decreases during the winter months, while demand for natural gas increases during the winter and summer months and decreases during the spring and fall months. Certain buyers of natural gas use natural gas storage facilities and purchase some of their anticipated winter requirements during the summer.
Other Growth Investments
AROP II’s strategy is to make strategic investments in what are considered attractive opportunities that support the growth and development of technology and energy and related infrastructure. The company intends to pursue opportunities that leverage its core competencies and relationships with electric utilities, industrial customers, and federal and state governments. The company’s strategy is to continue to identify and make strategic investments in the growth and development of technology, energy, and related infrastructure, and other opportunities that may create new platforms for future lines of business, which, if successful, could lead to long-term growth and cash flow generation.
Matrix Group
Matrix Group provides a variety of technology products and services for its mining operations and certain industrial and mining technology products and services to third parties around the world. Matrix Group’s products and services include data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software.
The operation of the company’s mines is subject to FMSHA and regulations adopted pursuant thereto.
Although the company has minimal surface mining activity and no mountaintop removal mining activity, SMCRA nevertheless requires that comprehensive environmental protection and reclamation standards be met during the course of and upon completion of its mining activities.
The company continues to evaluate the possible scenarios associated with CSAPR updates and MATS and the effects they may have on its business and its results of operations, financial condition, or cash flows.
The combustion of fossil fuels, such as the coal produced by the company and the oil & gas produced from the company’s mineral interests, results in the emission of GHGs, such as carbon dioxide and methane.
Some monitoring equipment that the company uses is subject to licensing under the Federal Atomic Energy Act. Water supply wells located on the company’s properties are subject to federal, state, and local regulations. In addition, the company’s use of explosives is subject to the Federal Safe Explosives Act. The company is also required to comply with the Federal Safe Drinking Water Act, the Toxic Substance Control Act, and the Emergency Planning and Community Right-to-Know Act.
History
Alliance Resource Partners, L.P. was founded in 1971. The company was incorporated in 1999.
