Risk Concentrations

12 Months Ended

Dec. 31, 2020

Risk Concentrations

Risk Concentrations

24. Risk Concentrations

Credit Risk and Major Customers

The Company has a formal written credit policy that establishes procedures to determine creditworthiness and credit limits for trade customers and counterparties in the over-the-counter coal market. Generally, credit is extended based on an evaluation of the customer’s financial condition. Collateral is not generally required, unless credit cannot be established. Credit losses are provided for in the financial statements and historically have been minimal.

The Company markets its thermal coal principally to domestic and foreign electric utilities and its metallurgical coal to domestic and foreign steel producers. As of December 31, 2020 and 2019, accounts receivable from sales of thermal coal of $41.7 million and $69.3 million, respectively, represented 38% and 37% of total trade receivables at each date. As of December 31, 2020 and 2019, accounts receivable from sales of metallurgical-quality coal of $69.1 million and $98.8 million, respectively, represented 62% and 59% of total trade receivables at each date.

The Company uses shipping destination as the basis for attributing revenue to individual countries. Because title may transfer on brokered transactions at a point that does not reflect the end usage point, they are reflected as exports, and attributed to an end delivery point if that knowledge is known to the Company. The Company’s foreign revenues by geographical location as follows:

	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2020		2019		2018
(In thousands)
Europe	$	289,176	$	537,117	$	559,165
Asia		138,086		322,029		452,711
Central and South America		56,905		82,476		79,085
Africa		12,763		18,698		17,567
Brokered Sales		—		—		2,372
Total	$	496,930	$	960,320	$	1,110,900

The Company is committed under long-term contracts to supply thermal coal that meets certain quality requirements at specified prices. These prices are generally adjusted based on market indices. Quantities sold under some of these contracts may vary from year to year within certain limits at the option of the customer based on their requirements. The Company sold approximately 63.3 million tons of coal in 2020. Approximately 67% of this tonnage (representing approximately 50% of the Company’s revenues) was sold under long-term contracts (contracts having a term of greater than one year). Long-term contracts range in remaining life from one to three years.

Third-party sources of coal

The Company purchases coal from third parties that it sells to customers. Factors beyond the Company’s control could affect the availability of coal purchased by the Company. Disruptions in the quantities of coal purchased by the Company could impair its ability to fill customer orders or require it to purchase coal from other sources at prevailing market prices in order to satisfy those orders.

Transportation

The Company depends upon barge, rail, truck and belt transportation systems to deliver coal to its customers. Disruption of these transportation services due to weather-related problems, mechanical difficulties, strikes, lockouts, bottlenecks, and other events could temporarily impair the Company’s ability to supply coal to its customers. In the past, disruptions in rail service have resulted in missed shipments and production interruptions.