Dallas, Texas 03/17/2014 (FINANCIALSTRENDS) – Alpha Natural Resources, Inc.(NYSE:ANR) the metallurgical and thermal coal exporter and supplier has been recently hauled over the coals, so to say, for environmental demeanours in three states, in the country. The organization, with diversified coal supplies portfolio has been quick to address the issue by drawing up a consent decree with Environmental Protection Agency as well as the DOJ, within the context of the Clean Water Act.
Affiliates discharge lead to allegation
The issue was related to water discharge beyond the permitted limits by affiliates of ANR operating in Kentucky, Tennessee, West Virginia, Virginia, and Pennsylvania. However, the compliant did not recognize any health hazards due to the excess discharge.
Consent Decree includes higher environmental compliance
Alpha Natural Resources, Inc. (NYSE:ANR) as part of the agreement at total of $27.5 million will be paid in civil penalties to civic authorities in the three states and the federal government. The consent decree will now see Alpha implementing multiple environmental management systems as well as investing in higher standards of reporting and auditing protocol. The agreement will also see Alpha install selenium as well as osmotic pressure treatment facilities.
However, the bottom-line for ANR is not in being compliant, but the long-term financial commitment these new regulations will require. Already, Alpha has hit a couple of troughs on the stock market, as in the previous quarters it chose to deal much below the industry standard price of $140 at $96.53 per ton in metallurgical coal.
Alpha Natural Resources, Inc. (NYSE:ANR) is therefore, unable to show high-growth and profits, given the low margins. Additionally, Alpha has 56% of its sales for 2014 already invoiced at $94.66 per ton. How Alpha will choose to emerge from these price-bound issues, and survive in the competitive sector, where peers have wider pricing leverage, will be the biggest challenge for it in this fiscal.