TECO sold 6.3 million tons of coal in 2012 at $95 per ton compared to 8.1Mt sold in 2011 at almost $88 per ton.
The company said the 2012 full-year cost of sales reflected spreading of fixed costs over fewer tons, costs associated with personnel reduction and the idling of certain mining operations.
Increased production costs were also driven by increased diesel fuel usage as a result of trucking coal and overburden further due to the lack of new surface-mine permits.
For the three months ending in December, TECO Coal profits were down 19% compared to Q4 2011 to $10.8 million on sales of 1.4Mt.
TECO Energy as a whole saw Q4 profits fall 15% compared to last year, but TECO president and chief executive John Ramil focused on stronger operating results and expansion progress at Florida’s Polk coal-gasification power station.
“TECO Coal reported strong results on lower volumes and was proactive in reducing production and cost and was able to deliver good 20112 results even in a weak market,” he said.
“And although TECO Coal will reduce production again in 2013 … it is positioned to produce $12 million of net income in 2013 in the current weak coal market.”
TECO is predicting 2013 to be a transitioning and challenging year with its Tampa Electric subsidiary experiencing pressures form a slow economic recovery and mounting operations and maintenance costs.
The company said it had 90% of its expected coal sales of between 5.2 and 5.7Mt contracted for 2013 with a product mix of about 50% specialty coals and 50% utility steam coal.
The average selling price across all products is expected to be $86 per ton.
