CAPTURING THE UPSIDE OF VOLATILITY 

During the past decade the coal industry has gone through a significant period of volatility, precipitated by a convergence of factors:

  • the collapse in fossil fuel energy prices in 2019-2020
  • unrelenting global demand for energy in general
  • cheap access to capital
  • over-levered balance sheets 
  • continued gains in renewable energy forms supported by massive government subsidies

A new space for private capital

Our view is that longer term fossil fuels usage is in a slow decline but will remain a vital and necessary part of overall energy consumption for many years ahead. 

Private capital will replace or supplement public capital investments in this space, and investments centered around strategically chosen producers will allow for significant investment returns in even the more severe pricing downturns. These producers will have the following advantageous characteristics:

  • low-cost production
  • little or no debt
  • non-unionized work force
  • no legacy environmental issues
  • access to both domestic and export markets

Pinpointing opportunity while managing risk

Rather than buy and own large expanses of coal producing properties—and the greater exposure they entail—AmWest’s strategy entails modest capital investments in fully permitted, bonded, small to medium size mines that are in various stages of restart. These targeted investments are, for now, in need of working capital and equipment to expand production on their permits. 

Shipping Energy

OUR PARTNERS

Maritime Partners is our logistics partner providing tug and barge services to move coal to AEP and Port of New Orleans loading terminals in support of overseas customers.

With a fleet of over 2,000 push boats, tugboats, and hopper/tank barges, Maritime is one of the largest independent operators on the Mississippi as well as coastal and inland waterways. Shipping from New Orleans to a customer’s final destination is arranged and paid for by the respective end buyers. AMC’s trade finance partner will pay for the coal once delivered to Maritime Partners’ boats for transportation to The Port of New Orleans. Currently we are arranging third-party trade finance needs for the duration of transport from KY to NOLA. 

The Mercury Group is a consulting firm specializing in global commodity supply chain management and collateral management services for financial institutions. Mercury’s team has extensive experience in many commodity sectors and provides bespoke services for producers, mining companies, trading companies, banks and funds involved in commodity trade.

We also collaborate seamlessly with a select group of trusted advisors:

Helena Jackson, Pikeville, KY • Contracts and mining negotiations

Watson, Farley and Williams, NY • Maritime banking 

Jain Jacob, CPA PLLC, New City, NY • Accounting