Warrior Met Coal
Warrior Met Coal Inc. is a public company formed in 2015 to own and operate the Brookwood Mines and Blue Creek Mine, a series of underground metallurgical coal mines accessing the Blue Creek Seam of the Warrior coal field near Brookwood in Tuscaloosa County. In addition to coking coal, the mines produce methane, which the company processes and sells as natural gas. The company's CEO is Walter Scheller III, who was also the CEO of predecessor Walter Energy from 2011 to 2016.
Warrior Met Coal was formed on September 3, 2015 with backing from private equity firms Apollo Global Management, Blackstone Inc., KKR and Franklin Mutual Advisers, in order to buy the coal mining assets of Walter Energy, which had filed for Chapter 11 bankruptcy protection in July. As part of the restructuring agreement, Walter Energy's collective-bargaining agreement with workers represented by the United Mine Workers of America, as well as its pension and health obligations to 2,800 retired miners and their dependents, were terminated. In their renegotiated 5-year contract with the new company, miners agreed to a 20% pay cut and reduced benefits to help the business emerge from bankruptcy. The UMWA has estimated that those concessions represented a $1.1 billion savings for the company.
Warrior Met Coal went public on April 13, 2017. Its shares are traded on the New York Stock Exchange with the ticker symbol HCC (for "Hard Coking Coal"). Since its public offering, the company has paid investors more than $4 billion in dividends and stock buybacks, and offered bonuses to upper management of up to $35,000, while also borrowing $350 million on the bond market. These moves bolstered the company's share price over the next two years, during which time the private equity investors cashed out all of their holdings. Nearly 15% of the company's outstanding shares were acquired by the asset management firm BlackRock (not related to Blackstone)
When Warrior Met Coal and the UMWA began negotiating for a new contract in 2021, the company offered only employees a 6% raise over five years, or about a third of the wages they gave up during the 2016 bankruptcy, with no increase in other benefits. When talks failed, the union declared a strike, which continued for nearly two years. Of the 1,100 workers who participated in the strike, 250 returned to Warrior Met Coal on March 2, 2023 when the UMWA called for a conditional end to the labor action. The union brought a slate of proposed policy changes to shareholders in April 2024.
A fatal accident occurred at Warrior Met Coal's Mine No. 4 on August 30, 2023. Three miners were injured, and one died at DCH Regional Medical Center from those injuries.
References
- Volkman, Eric (April 13, 2017) "Warrior Met Coal IPO: What Investors Need to Know." The Motley Fool
- "US met-coal Warrior continues to weigh growth." (August 1, 2019) Mining Journal
- Patterson, Scott & Jonathan Randles (May 1, 2020) "Coal Producers Struggle After Years of Investor Payouts." The Wall Street Journal
- Thornton, William (November 23, 2021) "Elizabeth Warren, Bernie Sanders: Equity firms ‘made off like bandits’ while striking Alabama coal miners struggle." The Birmingham News
- O'Leary, A. J. (August 5, 2022) "Warrior Met Coal reports record earnings even as clogged supply chain bloats inventory." Birmingham Business Journal
- Robinson, Carol (August 30, 2023) "1 miner killed, 2 injured in accident at Warrior Met Coal." AL.com
- Thornton, William (March 26, 2024) "After Warrior Met Coal strike, miners’ union, AFL-CIO urge reforms from stockholders." AL.com
External links
- Warrior Met Coal website