Preference Rights Lease Application (PRLA) Settlement Income

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Preference Rights Lease Application (PRLA) Settlement Income

Preference Rights Lease Application Settlement Income

The Company recorded a $39.0 million gain during the third quarter of 2019 related to a settlement with the United States Department of Interior over a long-standing dispute, dating back to the 1970’s, on the valuation and disposition of Preference Rights Lease Application that Arch controlled in northwestern New Mexico with a joint venture partner. As part of the settlement, Arch received $67.0 million in the form of royalty credits on its federal coal leases which will be used to settle 50% of the Company’s monthly royalty obligations. Additionally, as part of the settlement, Arch made a one-time payment of $27.0 million to its’ partner in the venture for its ownership interest in the underlying mineral reserves, as well as paying $1.0 million in closing fees.

The Company has utilized $13.3 million of the royalty credits as of December 31, 2019, and based on current planned production levels and sales commitments, anticipates the majority of the remaining balance will be monetized by the end of the 2020 calendar year.