AI Fund Awards 2017

Acquisition International - International Fund Awards 2017 9 CNX Coal Resources LP IF17004 Best Fossil Fuel Fund (YTD): CNXC & Mining Industry CFO of the Year 2017 - USA CNX Coal Resources LP CNXC has a 25% undivided interest in and full operational control over CONSOL Energy’s Pennsylvania mining complex (PAMC). The complex is a highly automated and technologically advanced underground mining operation with 791.4 million tons of high-Btu bituminous coal reserves. Lori outlines how this asset is managed in order to create strong returns for the company. “The PAMC has always been at the leading edge of technology when it comes to coal mining in the USA. We are one of the leading experts in longwall mining technology, which is the most productive technique of underground mining. Our management team is very focussed on the technological changes and developments in the underground mining sector. We have a dedicated group of engineers who continuously work with vendors, equipment manufacturers and other players to ensure that we have the most advanced equipment and techniques. This approach is not just limited to mining. “Overall, we continuously evaluate and implement new technologies/products that help us on marketing, safety and environmental compliance, and all sectors within our company.” Currently the coal industry faces several challenges. The biggest threat to the industry is low cost natural gas. For a company to be successful in this industry, it has to be a very low cost, reliable supplier to its customers. The goal is to achieve the lowest delivered cost of fuel on an MMBtu basis for customers. In addition, differentiation in such a highly competitive market is crucial, as Lori emphasises. “While coal is widely seen as a commodity, we have successfully differentiated our product from our peers. We have achieved this by highlighting the higher heat content and ability to switch into premium markets (coking vs thermal). Furthermore, our marketing team has spent a lot of time in identifying and targeting the customers that could be our long term partners and provide us more value for our product. These identified customers also view CNXC as a strategic fit given the premium quality of our coal, logistical advantages and innovative pricing structure that we offer. “Alongside this we view our customers as our partners. We want to have open communication with our customers so that we understand their requirements/constraints and work with them accordingly. In return they provide us with timely and accurate feedback on our performance so we can get better, and it is this communicative, collaborative approach which marks us out as the best possible option for our customers.” Looking ahead, Lori is positive and excited about the future as CNXC seeks to build upon its current success. “The past twelve months proved very challenging for the US coal industry but I am very pleased with what the CNXC team has been able to do for its common unitholders. We not only continued to pay them a very strong and attractive distribution yield, but we also grew the company significantly by acquiring additional assets. This was achieved by significant cost reductions achieved by our operations team, contributions from our support staff and our marketing team’s ability to gain market share during those challenging times. Heading into 2017, the CNXC team continues to remain focussed on growing the company and generating attractive returns for our unitholders. “In order to achieve this we have a very well laid out growth strategy. Our first goal is to acquire the remaining 75% of the ownership of the PAMC that currently rests with our sponsor. We know that asset very well and we are already operating the asset and as such we have eliminated the integration risk. This bodes well and I am confident that this asset will prove to be an excellent addition to our current portfolio.” CNX Coal Resources LP (CNXC) is a growth-oriented master limited partnership sponsored by CONSOL Energy Inc. to manage and further develop all of CONSOL’s active coal operations in Pennsylvania. We invited Chief Financial and Accounting Officer Lori Ritter to tell us more. Company: CNX Coal Resources LP Name: Diane Chardello Email: [email protected] Web: www.cnxlp.com “Overall, we continuously evaluate and implement new technologies/products that help us on marketing, safety and environmental compliance, and all sectors within our company.”

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