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other hazards that could also result in personal injury and loss of life, pollution and suspension of operations.
Any of these risks could adversely affect our ability to conduct operations or result in substantial loss to us as a result of
claims for:
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personal injury or loss of life;
damage to and destruction of property, natural resources and equipment, including our coal properties and our coal
production or transportation facilities;
pollution and other environmental damage to our properties or the properties of others;
potential legal liability and monetary losses;
regulatory investigations and penalties;
suspension of our operations; and
repair and remediation costs.
In addition, the total cost of coal sold and overall coal production may be adversely affected by various factors. For
example, unit costs were negatively impacted in 2014 due to adverse geological conditions at the Enlow Fork Mine, primarily
related to sandstone intrusions, along with adverse geological conditions and equipment issues at the Harvey Mine, primarily
related to sandstone intrusions, which resulted in reduced coal production at both the Enlow Fork and Harvey Mines. Although
we maintain insurance for a number of risks and hazards, we may not be insured or fully insured against the losses or liabilities
that could arise from a significant accident in our coal operations. We may elect not to obtain insurance for any or all of these
risks if we believe that the cost of available insurance is excessive relative to the risks presented. In addition, pollution and
environmental risks generally are not fully insurable. Moreover, a significant mine accident could potentially cause a mine
shutdown. The occurrence of an event that is not fully covered by insurance could have a material adverse effect on our
business, financial condition, results of operations, cash flows and ability to make cash distributions.
In addition, if any of the foregoing changes, conditions or events occurs and is not excusable as a force majeure event, any
resulting failure on our part to deliver coal to the purchaser under our contracts could result in economic penalties, suspension
or cancellation of shipments or ultimately termination of the agreement, any of which could have a material adverse effect on
our business, financial condition, results of operations, cash flows and ability to make cash distributions.
All of our mines are part of a single mining complex and are exclusively located in the Northern Appalachian Basin,
making us vulnerable to risks associated with operating in a single geographic area.
All of our operations are conducted at a single mining complex located in the Northern Appalachian Basin in
southwestern Pennsylvania. The geographic concentration of our operations at the Pennsylvania mining complex may
disproportionately expose us to disruptions in our operations if the region experiences severe weather, transportation capacity
constraints, constraints on the availability of required equipment, facilities, personnel or services, significant governmental
regulation or natural disasters. If any of these factors were to impact the Northern Appalachian Basin more than other coal
producing regions, our business, financial condition, results of operations and ability to make cash distributions will be
adversely affected relative to other mining companies that have a more geographically diversified asset portfolio.
The availability and reliability of transportation facilities and fluctuations in transportation costs could affect the demand
for our coal or impair our ability to supply coal to our customers.
Transportation logistics play an important role in allowing us to supply coal to our customers. Any significant delays,
interruptions or other limitations on the ability to transport our coal could negatively affect our operations. Currently, all of our
coal is transported from the Pennsylvania mining complex by rail. Delays and interruptions of rail services because of
accidents, infrastructure damage, lack of rail or port capacity, weather related problems, governmental regulation, terrorism,
strikes, lock-outs, third-party actions or other events could temporarily impair our ability to supply coal to customers and
adversely affect our profitability. In addition, transportation costs represent a significant portion of the delivered cost of coal
and, as a result, the cost of delivery is a critical factor in a customer’s purchasing decision. Increases in transportation costs,
including increases resulting from emission control requirements and fluctuations in the price of locomotive diesel fuel and
demurrage, could make our coal less competitive, which could have a material adverse effect on our business, financial
condition, results of operations, cash flows and ability to make cash distributions.
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