NRP’s net income reached $US25.2 million for the September quarter, down 30% year-on-year but up 424% from the $4.8 million earned in the June quarter.

A master limited partnership that owns coal reserves along with coal handling and transportation infrastructure in the Appalachia, Illinois Basin and Powder River Basin, NRP said coal markets were improving.

Noting that US steel plants were running at less than 50% of capacity over the course of the year, NRP said the current utilization rate was up to 60%.

“While this rate is still lower than the 70 per cent utilization rate in October 2008, monthly raw steel production has increased every month since April,” the company said.

“The coal producers are also exporting more metallurgical coal. Exports of metallurgical coal for the month of August, the latest data available, were 30 per cent higher than August of 2008.”

But NRP said there were still significant thermal coal stockpiles at the nation’s coal-fired power stations.

“Overall demand for electricity is down approximately 4 per cent year-to-date, and steam coal demand is down even further due to weak industrial demand and low natural gas prices.”

In September, NRP acquired more than 200 million tons of coal reserves associated with the Deer Run mine in Illinois.

Construction of a new longwall mine is underway at Deer Run to produce up to 10Mt a year.

Under its agreement with the Cline Group, NRP has paid $10 million and will pay another $245 million over the next 27 months.

NRP has an extra $278 million available in its credit facility and ended September with a cash position of $60.9 million.