Commodity stocks are supposed to move on price. Coal goes up, the miner goes up. Coal goes down, so does the miner.
Last quarter, one steelmaking-coal producer didn’t follow the script. The benchmark price for its coal, according to the company, averaged about 29% more than a year earlier. The average price per ton it actually received rose just 6%, from $130.01 to $137.82. Yet revenue jumped 71%, to $509.7 million. Adjusted EBITDA, a cash-earnings measure, nearly tripled, from $53.6 million to $156.9 million. Net income went from $5.6 million to $87.4 million.
Price didn’t do that. Tonnage did. The company shipped 3.65 million tons, up 65% in a year, and its cash cost per ton fell 9%.
The reason is a hole in the ground. Over the past few years this company spent about $1.03 billion building a new underground mine in Alabama, and the cost showed up in its cash flow for a long time. It generated negative free cash flow of about $90 million in 2024 and again in 2025, because capital spending ran $457 million and $320 million. The mine’s longwall, the machine that shears coal off the seam, started in October 2025, eight months ahead of schedule. Last quarter’s spending was $28.9 million, against $94.3 million a year earlier.
That is how a company goes from digging a mine to harvesting one. And the reaction?
The stock closed Wednesday at $89.98, about 19% below its 52-week high. In late August, its CEO sold 50,000 shares at $110, about $5.5 million. On the earnings call, management said the second half should be weaker than the first, with lower selling prices and less free cash flow, according to a call summary. It described a “lower range-bound market” for coal.
So there are two stories. In one, this is a commodity producer near the top of a price cycle, and the smart people are leaving. In the other, the expensive part is over, and the market is still valuing the company on its building years.
Both can’t be right. The way to tell them apart is to ask what the cash flow looks like when prices stop helping.
And this is a company whose latest report beat Wall Street’s profit estimate by 13%.
The company is…
