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Item 1. Business

2023-02-15 compared with 2022-02-22 · 185 added, 139 removed, 335 unchanged (49% of the section changed)

We are a U.S.-based, environmentally and socially minded supplier to the global steel industry headquartered in Brookwood, Alabama.

Warrior Met Coal, Inc.

(together with its subsidiaries, the "Company" or "Warrior") is a U.S.-based, environmentally and socially minded supplier to the global steel industry headquartered in Brookwood, Alabama.

We are dedicated entirely to mining non-thermal met coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia.

We are a large-scale, low-cost producer and exporter of premium met coal, also known as hard coking coal (“HCC”), operating highly-efficient longwall operations in our underground mines based in Alabama, Mine No.

We are a large-scale, low-cost producer and exporter of premium quality met coal, also known as hard coking coal (“HCC”), operating highly-efficient longwall operations in our underground mines based in Alabama, Mine No.

4 and Mine No.

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All of our resources are primarily allocated to the mining, transportation and marketing of met coal.

The premium nature of our HCC makes it ideally suited as a base feed coal for steel makers and results in price realizations near or above the Platts Index.

The premium nature of our HCC makes it ideally suited as a base feed coal for steel makers and results in price realizations near or above the S&P Global Platts Index (as defined below).

The combination of low sulfur, low-to-medium ash, LV to MV, and other characteristics of our coal, as well as our ability to blend them, makes our HCC product an important component within our customers’ overall coking coal requirements.

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and under the SEC's new rules governing mineral reserves, specifically subpart 1300 of Regulation S-K under the Modernization of Property Disclosures for Mining Registrants, has 68.2 million metric tons of recoverable reserves and 39.2 million metric tons of coal resources exclusive of reserves, which total 107.4 million metric tons.

We have the ability to acquire adjacent reserves that would increase the total reserves to over 154 million metric tons with a mine life of approximately 50 years assuming a single longwall operation.

We have the ability to acquire adjacent properties that could increase the total recoverable reserves to approximately 104.0 million metric tons with a mine life of approximately 30 years assuming a single longwall operation.

Further, we believe that we have the potential to elevate coal resources exclusive of reserves to recoverable reserves contingent upon favorable results from future exploration campaigns and property acquisitions, which we believe could increase the total reserve tons by up to 40.0 million metric tons for a total of 144.0 million metric tons with a mine life of 40 plus years.

High Vol A has traditionally priced at a slight discount to the Australian premium LV and the U.S.

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This advantage results in a higher margin for our met coal.

strategic location is enhanced by our long-tenured, well-established customer portfolio, which includes significant recurring sales to multiple customers in excess of 10 years.

Our strategic location is enhanced by our long-tenured, well-established customer portfolio.

High realized prices and low variable cost structure drive industry leading margins .

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Unlike other U.S.

coal producers in our peer group, we have no pension or OPEB legacy liabilities with manageable surety bond requirements.

coal producers in our peer group, we have no pension or OPEB legacy liabilities.

With minimal legacy liabilities, we are not burdened by the annual fixed obligations that are typically associated with these types of liabilities.

Our clean balance sheet and its low sustaining capital expenditure requirements position us to generate strong cash flows across a range of met coal price environments.

Additionally, we expect our cash flows to benefit from a low cash tax rate as a result of our significant federal NOLs.

As a result of these tax assets, and the repeal of the corporate alternative minimum tax ("AMT"), we believe our effective cash tax rate will be approximately 0%, exclusive of the AMT credit refunds, until our NOLs are fully utilized or expire, which will enable strong cash conversion from our operating profits.

Additionally, we expect our cash flows to benefit from a low cash tax rate until our NOLs are fully utilized or expire, which will enable strong cash conversion from our operating profits.

Disciplined financial policies to ensure stable performance .

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Our Chief Executive Officer (“CEO”), Walter J.

Scheller, III, is the former CEO of Walter Energy and has nine years of direct experience managing Mine No.

Scheller, III, is the former CEO of Walter Energy, Inc.

("Walter Energy") and has ten years of direct experience managing Mine No.

4 and Mine No.

7, and over 30 years of experience in longwall coal mining.

Furthermore, following the acquisition of certain assets of Walter Energy, we hired several key personnel with extensive direct operational experience in met coal longwall mining, including our Chief Operating Officer, Jack Richardson, and our Chairman, Stephen D.

We have a strong record of operating safe mines and are committed to environmental excellence.

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4 and 1.61 at Mine No.

7 for the year ended December 31, 2021, which is considerably lower than the national total reportable incidence rate for all underground coal mines in the United States of 4.89 for the nine months ended September 30, 2021, which represents the latest data available.

Strong focus on reducing greenhouse gas emissions.

Investors and other third parties are increasingly focused on sustainability matters, and we are committed to reducing the release of greenhouse gases (“GHGs”) from our operations.

7 for the year ended December 31, 2022, which is 63% lower than the national total reportable incidence rate for all underground coal mines in the United States of 4.68 for the nine months ended September 30, 2022, which represents the latest data available.

Strong focus on reducing greenhouse gas emissions and water usage.

Investors and other third parties are increasingly focused on sustainability matters, and we are committed to reducing the release of greenhouse gases (“GHGs”) from our operations and our water usage.

GHG emissions are produced as a by-product of mining activities, as operations in underground metallurgical coal mines produce coal bed methane.

With a view towards being an industry leader in environmental performance, we are actively engaged in several initiatives that occur before, during and after mining to reduce GHG emissions, including the capture of coalbed methane.

With a view towards being an industry leader in environmental stewardship, we are actively engaged in several initiatives that occur before, during and after mining to reduce GHG emissions, including the capture of coalbed methane.

We also continuously work to evaluate and test emerging technologies that can optimize our water usage.

The Company currently captures approximately 67% of the coalbed methane that is produced during our mining activities as part of our commitment to reduce the Company’s GHG emissions.

We are then able to sell this gas into the natural gas market.

The Company also operates a low-quality gas plant, which is able to improve the quality of ordinarily unsaleable gas that would otherwise escape to the atmosphere.

The improved gas is then sold and used by consumers.

This plant operates using a complex system that concentrates the methane by removing other gases such as nitrogen and oxygen.

In 2021, in conjunction with a third party, we also installed our first flare system to destroy methane vented from open degasification boreholes.

We also successfully achieved a 99.89% compliance record with the EPA National Pollutant Discharge Elimination System ("NPDES") program, which addresses water pollution by regulation point source discharges.

We remain committed to taking steps to decrease our carbon footprint by reducing GHG emissions and decreasing our consumption of natural resources.

Our Business Strategies

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Maximize organic growth.

In the first quarter of 2020, we announced the commencement of the development of Blue Creek into a new, world-class longwall mine located in Alabama near our existing mines.

Due to COVID-19, we delayed commencement of the development of Blue Creek .

On May 3, 2022, we announced the relaunch of the development of Blue Creek into a new, world-class longwall mine located in Alabama near our existing mines.

The new single longwall mine at Blue Creek is expected to have the capacity to produce an average of 4.4 million metric tons per annum of premium High Vol A met coal over the first ten years of production.

Once fully developed, we expect Blue Creek to be a transformational investment that will increase annual production capacity by 54% and expand our product portfolio to our global customers, offering three premium hard coking coals that are expected to achieve the highest premium met coal prices in the seaborne markets.

Once fully developed, we expect Blue Creek to be a transformational investment that will increase annual production capacity by 60% and expand our product portfolio to our global customers, offering three premium HCCs that are expected to achieve the highest premium met coal prices in the seaborne markets.

Under the SEC's new rules governing mineral reserves, specifically subpart 1300 of Regulation S-K under the Modernization of Property Disclosures for Mining Registrants, Blue Creek has 68.2 million metric tons of recoverable reserves and 39.2 million metric tons of coal resources exclusive of reserves, which total 107.4 million metric tons.

We have the ability to acquire adjacent reserves that would increase total recoverable reserves to over 154 million metric tons at Blue Creek.

Blue Creek is expected to have a mine life of approximately 50 years assuming a single longwall operation.

Broaden our marketing reach and maintain strong correlation between realized coal prices and the Platts Index .

We have implemented a strategy to improve both our sales and marketing focus, with a goal of achieving better pricing relative to the Platts Index, which includes:

Further, we believe that we have the potential to elevate resources exclusive of reserves to recoverable reserves contingent upon favorable results from future exploration campaigns and property acquisitions, which we believe could increase the total reserve tons by up to 40.0 million metric tons for a total of 144.0 million metric tons with a mine life of 40 plus years.

Broaden our marketing reach and maintain strong correlation between realized coal prices and the S&P Platts Index .

We have implemented a strategy to improve both our sales and marketing focus, with a goal of achieving better pricing relative to the S&P Platts Index, which includes:

(i) opportunistic selling into the spot met coal market and (ii) selected instances of entering into fixed price contracts.

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Traditionally, we have predominantly marketed our coal to European and South American buyers.

For the year ended December 31, 2021, our sales geographic customer mix was 52% in Asia, 39% in Europe and 9% in South America.

The higher mix of sales into Asia is the result of our taking advantage of opportunities with new Chinese customers due to the impact of the Chinese ban on Australian coal.

For the year ended December 31, 2022, our sales geographic customer mix was 61% in Europe, 20% in Asia and 19% in South America.

Since February 2017, we have had an arrangement with Xcoal Energy & Resource (“Xcoal”) to serve as Xcoal’s strategic partner for exports of LV HCC into certain markets.

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While the volumes being sold through this arrangement with Xcoal are relatively limited, we are positioned to potentially benefit from Xcoal’s expertise and relationships across all coal that we sell.

To that end, we also have an incentive-based arrangement with Xcoal to cover other tonnage, in the event Xcoal is able to offer us a higher realized price relative to the Platts Index than we have previously achieved.

To that end, we also have an incentive-based arrangement with Xcoal to cover other tonnage, in the event Xcoal is able to offer us a higher realized price relative to the S&P Platts Index than we have previously achieved.

Capitalize on opportunities for technological innovation to continue to reduce our impact on the environment.

We strive to ensure that our business is focused on limiting environmental impact and on being an environmental steward in the communities where we live and work.

We focus our opportunities for technological innovation around GHG emissions, water management, waste management and biodiversity impact.

The Company currently captures approximately 64% of the coalbed methane that is produced during our mining activities as part of our commitment to reduce the Company’s GHG emissions.

We are then able to sell this gas into the natural gas market.

In addition to capturing pipeline quality gas, the Company also operates a low-quality gas plant, which is able to improve the quality of ordinarily unsaleable gas that would otherwise escape to the atmosphere.

The improved gas is then sold and used by consumers.

This plant operates using a complex system that concentrates the methane by removing other gases such as nitrogen and oxygen.

In 2021, we, along with a third party, installed two new carbon destroying units that destroy low quality gas from multiple de-gas wells.

We are in the process of evaluating additional wells to be piped to the new carbon destroying units.

The Company and a third party also built a pilot or demonstrator plant.

This plant successfully operated from 2014 to 2017.

During the demonstration period, the plant effectively destroyed coal mine methane released from our underground operations.

A larger unit is now in the permitting process to help destroy coal mine methane from a fan installation.

We are working closely with several vendors to progress such efforts.

We also successfully achieved a 99.2% compliance record with the Environmental Protection Agency ("EPA") National Pollutant Discharge Elimination System program, which addresses water pollution by regulation point source discharges.

We currently have a goal to reduce water usage at our current facilities by 25% by 2030.

We are fully committed to being a responsible corporate citizen to our employees, customers, communities, and other stakeholders.

We are committed to providing our products in a responsible manner.

In 2022, we partnered with a third-party consultant to develop a comprehensive Environmental, Social and Corporate Governance ("ESG") strategy that was focused on the following objectives, among others, materiality and risk assessment, creating and tracking measurable goals, GHG reduction, water usage reduction, enhancing governance standards and performing a community impact assessment.

We refocused on our long-term environmental goals and successfully set aggressive, yet achievable targets for decreasing our carbon footprint.

In connection with this strategy, we established targets which include, among others, a 50% reduction in GHG emissions by 2030 and 25% water usage reduction by 2030.

In 2023, we are planning to install the first full-scale methane destroying Regenerative Thermal Oxidizer ("RTO"), which is anticipated to result in significant emission reductions, and we are working with industry experts to test and implement the first stage of a new corporate Environmental Management Information System ("EMIS") software, which we plan to continually improve and enhance over time.

The EMIS system will include monitoring and tracking for water quality and usage, waste management, and GHG emissions, among other items, which will streamline our ability to measure and evaluate our environmental performance data against our stated objectives and goals.

The Company’s management and board of directors (the "Board") are increasingly focused on these and other opportunities for technical innovation.

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Our two operating mines and Blue Creek are located approximately 300 miles from our export terminal at the Port of Mobile in Alabama, which we believe to be the shortest mine-to-port distance of any U.S.-based met coal producer.

and variable cost structure, flexible and efficient rail and barge network underpins our cost advantage and dependable access to the seaborne markets.

Our low and variable cost structure, and our flexible and efficient rail and barge network underpins our cost advantage and dependable access to the seaborne markets.

We sell our coal to a diversified customer base of blast furnace steel producers, primarily located in Europe, South America and Asia.

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These qualities make our coal ideally suited as a coking coal for the manufacture of steel.

As a result of our high quality coal, our realized price has historically approximated the Platts Premium Low Volatility (“LV”) Free-On-Board (“FOB”) Australia Index price (the “Platts Index”).

As a result of our high quality coal, our realized price has historically approximated the Platts Premium Low Volatility (“LV”) FOB Australian Index price (the “S&P Platts Index”).

In contrast, coal produced in the Central Appalachian region of the United States is typically characterized by medium-to-high VM and a CSR that is below the requirements of the Australian Index price.

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Substantially all of our met coal sales consist of sales to international customers.

We are currently in the process of testing alternative outbound logistics routes to increase transportation and vessel shipping optionality.

We also have 68.2 million metric tons of recoverable reserves and 39.2 million metric tons of coal resources exclusive of reserves, which total 107.4 million metric tons, at Blue Creek located to the northwest of Mine No.

4, based on a reserve report prepared by Marshall Miller.

We have the ability to acquire adjacent reserves that would increase total reserves to over 154 million metric tons at Blue Creek.

We have the ability to acquire adjacent reserves that would increase total reserves to 144 million metric tons at Blue Creek.

According to our third-party reserve report, the met coal reserve base of Blue Creek is a high-quality High Vol A coal that is characterized by low-sulfur and high CSR.

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As of December 31, 2022, our operations were producing below this capacity primarily due to the United Mine Workers of America (“UMWA”) strike.

Our operations have continued throughout the period of the strike, and have generated strong cash flows throughout the period of the strike, including $150.9 million in net income and $457.0 million in Adjusted EBITDA during the year ended December 31, 2021.

Our operations have continued throughout the period of the strike, and have generated strong net income of $641.3 million and record Adjusted EBITDA of $994.2 million during the year ended December 31, 2022.

Coal Preparation and Blending

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We focus on long-term customer relationships where we have a competitive advantage.

We sell most of our met coal under fixed supply contracts primarily with indexed pricing terms and volume terms of one to three years.

We typically sell our met coal under fixed supply contracts primarily with indexed pricing terms and volume terms of one to three years.

Some of our sales of met coal can, however, occur in the spot market as dictated by available supply and market demand.

Our business is not substantially dependent on any contract, such as a contract to sell the major part of our products or other agreement to use a patent, formula, trade secret, process or trade name upon which our business depends to a material extent.

For more information regarding our customers, see Note 2 to our consolidated financial statements included elsewhere in this Annual Report.

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Our arrangement with Xcoal is expected to expand the geographic reach of our customers through Xcoal’s global presence.

Xcoal has 20 offices worldwide, including in Brussels, the UAE, Singapore, Beijing, Shanghai, Seoul, Mumbai, and Rio de Janeiro.

We expect to be able to leverage Xcoal’s more than 30 year history selling coal to key European and Asian steel

customers to further improve the selling prices of our met coal relative to the global Platts Index.

The increase in our sales to Asia in the current year was driven by Xcoal sales into China.

Trade Names, Trademarks and Patents

As part of the acquisition of certain assets of Walter Energy, we acquired all intellectual property, including copyrights, patents, trademarks, trade names and trade secrets, owned by Walter Energy and its subsidiaries and used or held for use in the business or our assets.

Promptly following the closing of the acquisition, Walter Energy, was required to discontinue the use of its name (and any other trade names or “d/b/a” names utilized by its subsidiaries) and may not subsequently change its name to or otherwise use or employ any name which includes the words “Walter.” We do not believe that any one such trademark is material to our individual segments or to the business as a whole.

We expect to be able to leverage Xcoal’s more than 30 year history selling coal to key European and Asian steel customers to further improve the selling prices of our met coal relative to the global S&P Platts Index.

Substantially all of our met coal sales are exported.

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We continually seek to develop relationships with suppliers that focus on reducing our costs while improving quality and service.

Environmental Responsibility and Sustainability

We also purchase services at our mine sites, including services related to maintenance for mining equipment, construction and temporary labor.

We do not believe that we have any operational or financial risk associated with our dependence on any individual service providers.

We have exposure to inflation in connection with the purchase of supplies that are used directly or indirectly in the normal course of production, such as belt structure, roof bolts, cable, magnetite, rock dust and other supplies, plus labor and parts used to repair and rebuild equipment.

These inflationary pressures have contributed to rising costs for us and may continue to do so in the future.

We are applying a number of different strategies to mitigate the impact of inflation on our operations, including placing purchase orders earlier, utilizing short term contracts and leveraging our supplier relationships.

Environmental, Social and Governance

The Company takes pride in its environmental record and strives to be an industry leader in environmental stewardship.

The Company recently released its annual environmental, social and governance sustainability report that was prepared in accordance with the codified standards of the Sustainability Accounting Standards Board and highlights the Company's strong environmental record.

We are partnering with a third-party consultant to develop a comprehensive ESG strategy that will be focused on the following, among others, materiality and risk assessment, creating and tracking measurable goals, GHG reduction, water usage reduction and reporting standards.

This comprehensive plan will be completed and made publicly available in 2022.

The Company recently released its annual ESG sustainability report that was prepared in accordance with the Global Reporting Initiative Standards (Core Option) and the Sustainability Accounting Standards Board standards for Coal Operations and highlights our goals of becoming an industry leader in environmental stewardship, maintaining a strong environmental compliance record and safety statistics that are better than the industry average, and forming collaborative partnerships focused on workforce development and our communities.

We partnered with a third-party consultant to develop a comprehensive ESG strategy that was focused on the following, among others, materiality and risk assessment, creating and tracking measurable goals, GHG reduction, water usage reduction and reporting standards.

This comprehensive plan was made publicly available in January 2023 and can be found in the "Corporate Sustainability" section of our website (http://www.warriormetcoal.com).

We continually invest in new technologies to lessen our environmental impact and to improve our efficiencies and productivity.

Our executive leadership team is focused on establishing qualitative and quantitative goals that hold us accountable to our investors, employees, customers, community, as well as other stakeholders.

For example, we are actively engaged in the EPA’s voluntary programs to reduce and report GHG emissions and to improve estimates of national GHG emissions.

With regard to the Company’s water management efforts, we have a strong environmental compliance record with the EPA’s National Pollutant Discharge Elimination System (NPDES) program, which addresses water pollution by regulating point sources that discharge pollutants into the waters of the United States.

We also monitor adjacent streams and groundwater wells quarterly in order to determine if these water supplies could potentially have been affected by mining operations.

Waste water, or water used for mining or processing of coal, is stored in locations such as impoundment structures or clarifying or settling ponds.

Additionally, the Company performs a minimum of at least one complete inspection of all tailing impoundments at intervals not to exceed seven calendar days as required by federal regulation, and all of the Company’s tailing impoundments are classified as “low-hazard” structures.

We continue to improve our land reclamation efforts, which has yielded success across all of our sites and facilities.

We began an aggressive reclamation campaign in 2017, which has successfully reclaimed

1,335 acres to date.

Finally, the Company is highly proactive in planning all ongoing and future activities to minimize negative impacts to wildlife and their habitats by mining activities.

Our executive leadership team, from our Board down, is fully committed to being a responsible corporate citizen

to our employees, customers, communities, and other stakeholders.

Highlights of our comprehensive ESG strategies are detailed below.

Environmental

We work to safely and efficiently produce some of the highest quality HCC met coal for our global customers while prioritizing the safety of our environmental footprint.

This includes accounting for and working to reduce our GHG emissions, water usage and impact on biodiversity.

GHG Emissions

We are proud of our environmental performance, including our award-winning reclamation activities.

We currently capture approximately 67% of the coalbed methane that is produced during our mining activities as part of our commitment to reduce GHG emissions.

We are actively engaged in the EPA's voluntary programs to reduce and report GHG emissions and to improve estimates of national GHG emissions.

We have completed our first GHG Scope 1 and Scope 2 emissions inventory in accordance with the GHG Protocol and aim to reduce our GHG emissions by 50% by 2030 from our 2021 baseline year.

In 2021, we successfully installed the first flare system to destroy methane vented from open degasification boreholes with the offset compliance credits being verified by the California Air Resource Board as part of the California Cap-and-Trade Program.

Looking ahead, in 2023, we plan on installing the first full-scale methane destroying RTO which is anticipated to result in significant emission reductions.

In addition to the innovations we are using to reduce our carbon footprint, we are also optimizing our operational plans to reduce GHG emissions.

In late 2023, we are planning on sealing a shaft at Mine No.

4, which is currently our largest source of emissions at Mine No.

Water Management

We continuously work to evaluate and test emerging technologies that can optimize our water usage.

Freshwater is primarily used for processing coal or sent underground for use in mining operations.

This optimizes the performance of our mining machinery and helps create a safer environment for our workforce.

In 2023, we plan to implement a system to optimize and monitor our water usage and recycling.

In addition to improving how we track and measure water consumption, we will strategically draw water from local rivers and springs to store in reservoirs which can be utilized during periods of low flow to prevent possible stress to the local hydrologic balance.

These actions, which are foundational to a three-phased water efficiency and optimization plan developed in 2022, provide an actionable pathway to meet and surpass our goal of reducing water usage by 25% by 2030.

Waste Management

We have a strong environmental compliance record (99.89%) with the EPA's NPDES program, which addresses water pollution by regulating point sources that discharge pollutants into U.S.

According to the World Resources Institute, we do not have any mines operating within or near regions identified with high or extremely high baseline water stress.

We are working with industry experts to test and implement the first stage of a new corporate EMIS software in 2023.

This system will include monitoring and tracking for water quality and usage, waste management, and GHG emissions, among other items.

Currently, we control seven certified tailings impoundment facilities that are subject to MSHA regulations and certification.

Of these seven impoundments, six are inactive and classified as low hazard facilities, and all are either already in active reclamation or planned to begin reclamation activities soon.

We are partnering with industry experts to review all current and planned tailings impoundments relative to the Global Industry Standard on Tailings Management, which sets a precedent for the safe management of existing and planned facilities, toward the goal of zero human or environmental harm.

We recognize the importance of our natural surroundings and aim to be the best stewards of the delicate and diverse natural ecosystem located on our properties and within the surrounding areas.

In 2021, we earned the Land Stewardship Award from the Alabama Mining Association for a wetland development project.

We strive to conduct all mining-related activities and environmental studies with the intent to minimize ecosystem impacts.

Our ADEM-authorized National Pollutant Discharge System discharge permits include quarterly toxicity tests that detect potential water quality issues that could impact local aquatic life.

If any evidence of potential impact is discovered, alternative operational plans are activated.

Field experts are also

consulted during the permitting process to provide guidance related to potential biodiversity impacts.

Over the previous five-year period we have reduced reclamation requirements by 19.3% or 1,300 acres.

The safety of our employees is rooted in our core values.

Our health and safety policies and programs are the cornerstone of our operating philosophy and are integrated into all of our daily operations and activities.

We are proud of our safety record, which includes a safety incidence rate that has consistently been over 20% better than the U.S.

industry average rate.

In 2022, our total incidence rate was 1.74, which is 63% lower than the national total reportable incidence rate for all underground coal mines in the United States of 4.68 for the nine months ended September 30, 2022, which represents the latest data available.

In 2021, we had 100% compliance with annual safety training as required by MSHA and we received the Sentinels of Safety award issued by the National Mining Association.

This is one of the most prestigious industry honors for safety, awarded annually to mines with a minimum of 4,000 injury-free hours.

We strive to recruit, hire and retain a talented and diverse team of people.

Our employees are supported with training and development opportunities to pursue their career paths and to ensure compliance with our policies.

We incorporate training best practices, provide continuing education and constantly reinforce individual skills.

We are committed to developing and retaining our workforce.

Our employees make us who we are, and we offer tools to identify, grow and nurture our talent, including our future leaders development program, annual supervisor and development training, employee education assistance and annual performance evaluations.

Human Capital

As of December 31, 2022, we had 854 employees, of whom 442 were hourly employees and 412 were salaried employees.

The Company prioritizes employee safety, wellbeing, personal and professional development, and diversity and inclusion.

The Board's Compensation Committee has direct oversight of our human resource policies and practices, including diversity, equity, and inclusion, employee relations, workplace culture, and talent development and retention.

Compensation and Benefits:

To recruit and retain the best and brightest talent, we have established a top-tier benefits package, which includes competitive salaries and performance-based incentives.

We also offer full-time employees the opportunity to participate in retirement benefits through a company-sponsored 401(k) account which includes a generous company match.

Our total compensation and benefits package is designed to stay competitive and to assist in achieving our goals of attracting, rewarding, and retaining employees by always focusing on employees and their families first.

We also offer our employees paid time off and an Employee Assistance Program which is a comprehensive network of accredited counselors and other specialized professional who provide support on several issues, including mental health, relationships, wellbeing, stress and personal finances.

In 2023, we are launching a volunteer PTO program through which employees will receive PTO to volunteer with organizations or causes that are important to them.

Talent Attraction:

We acknowledge the importance of developing and growing a strong and diverse workforce.

Our policies and practices support diversity and equality.

To help achieve this, we engage a broad range of communication channels, tools, and processes to attract highly capable external candidates to generate an experienced and diverse candidate pool.

We also work with universities to attract top candidates in key fields, while seeking to develop its in-house talent and providing opportunities for employees to increase their level of responsibility within the organization.

We have also elevated our efforts on minority and veteran recruiting by visiting and recruiting from Historically Black Colleges and Universities, growing existing and seeking new partnerships with groups to provide diverse internships, and attending and recruiting at military job fairs .

Employee Development and Retention:

We also recognize that employee engagement, development and talent retention are important factors in maintaining a highly skilled workforce and minimizing time and costs associated with turnover.

In addition to the highly competitive compensation and benefits package discussed above, our retention program focuses on valuing employees, their families, and helping each employee have an appropriate work-life balance.

To monitor this balance and other aspects of engagement, we seek candid feedback from employees via an annual employee engagement survey.

The results are aggregated and then used by management to continually improve our culture and retain our employees.

We also offer tuition reimbursement opportunities for those who wish to further their education.

These efforts help employees

pursue career paths that are both interesting and rewarding, and will also assist in their pursuit of their individual goals, while at the same time helping to develop robust talent pipelines that support broader company succession planning efforts.

Diversity, Equity and Inclusion:

We work to foster an environment in which each person can thrive.

This includes treating everyone with respect, valuing diversity, and fostering safe and inclusive environments.

Warrior's Code of Business Conduct and Ethics and Human Rights Policy promote and support diversity by offering a workplace in which people are protected from harassment and discrimination based on gender, race, age, sexual orientation, and other factors.

Employees have the right and are empowered to report issues via several reporting channels, including our third party-managed confidential employee hotline should they wish to remain anonymous.

As of year-end 2022, our Board was 33% female and 17% racially and/or ethnically diverse.

At the end of 2022, more than 18% of our workforce was racially or ethnically diverse, while almost 5% of the workforce is made up of women.

Human Righ ts:

Respect for human rights is a fundamental value, and we are committed to treating employees and stakeholders with dignity, respect, and equality consistent with the United Nations Universal Declaration for Human Rights.

In an effort to ensure a safe and inclusive work environment, Warrior has implemented policies and conducts annual training regarding human rights, anti-bullying, harassment, and discrimination.

Community Engagement

We understand the importance of making a difference in our community and that the support of our community is essential to our current and future mining operations.

Effectively engaging with members of the community is just as important as mining our premium quality metallurgical coal for our customers around the world.

In that spirit, we work to proactively foster constructive relationships that are founded on trust, dialogue, and collaboration for the overall benefit of our community.

This includes engagement with local schools, landowners, local government officials, and residents—many of whom are also Warrior employees or their family members.

Our External Affairs group works and engages with trade associations, community partners, non-governmental organizations (NGOs) and nonprofit organizations to provide helpful information and expertise regarding the Company and industry.

In 2022, we contributed over one million dollars to local nonprofits through sponsorships and other donations.

In 2023, our new volunteer PTO benefit will be available to all full-time employees to enable them to provide hands-on assistance to organizations or causes that are important to them throughout each year.

Our Board oversees our policies, creating strategies and initiatives that embrace ESG matters.

The Board's Nominating and Corporate Governance Committee has responsibility for developing our Corporate Governance Guidelines, recommending qualified Board candidates and overseeing evaluation of the Board and our management team.

Additionally, all four Board Committees (Nominating and Corporate Governance, Audit, Compensation, and Sustainability, Environmental Health and Safety) play specific and important roles in setting the tone by providing oversight for and fostering a culture of strong corporate governance, ethics, and compliance as described in the charters on our website.

The Company has dedicated employees that oversee the Company’s efforts with respect to various environmental issues, including our efforts with respect to the programs discussed above.

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This committee receives quarterly reports from Company management, during which the committee reviews and discusses the Company’s various environmental, health and safety initiatives and any issues related to these areas.

The safety of our employees is a core value for us.

Our health and safety policies and programs are the cornerstone of our operating philosophy and are integrated into all of our daily operations and activities.

Our continued emphasis on enhancing our safety performance has resulted in total reportable incident rates at Mine No.

4 and Mine No.

7, based on Mine, Safety and Health Administration (“MSHA”) criteria, which are lower than the national total reportable incidence rate for all underground coal mines in the United States.

This record reflects our effectiveness in protecting our employees.

In 2018, the Company hired a new Vice President of Safety, who is responsible for developing and overseeing health and safety programs at the Company’s mines, and he regularly reports to the Environmental, Health & Safety Committee so that the Board is apprised of the Company’s safety-related efforts and challenges.

Environmental and Regulatory Matters

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the National Environmental Policy Act with respect to the impacts of federal actions such as the issuance of permits and licenses;

and the Surface Mining Control and Reclamation Act of 1977 and its state counterparts with respect to environmental protection and reclamation standards for mining activities.

and the Surface Mining Control and Reclamation Act of 1977 and its state counterparts

with respect to environmental protection and reclamation standards for mining activities.

Compliance with these laws and regulations may be costly and time-consuming and may delay commencement, continuation or expansion of exploration or production at our operations.

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We received another letter from the DOL on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL.

Changes in the estimated claims to be paid or changes in the amount of collateral required by the DOL may have a greater impact on our profitability and cash flows in the future.” Under the Black Lung Benefits Act, as amended, each coal mine operator must make payments to a trust fund for the payment of benefits and medical expenses to claimants who

last worked in the coal industry prior to January 1, 1970.

On February 9, 2022, the DOL held a conference with representatives from the Company related to our appeal.

On July 12, 2022, we received a decision on our appeal from the DOL lowering the amount of collateral required to be posted from $39.8 million to $28 million.

We appealed this decision.

In addition, on January 19, 2023, the DOL proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers.

The proposed rules requires, among other requirements, all self-insured operators to post security of at least 120 percent of their projected black lung liabilities.

The changes in the estimated claims to be paid or changes in the amount of collateral required by the DOL may have a greater impact on our profitability and cash flows in the future.

Under the Black Lung Benefits Act, as amended, each coal mine operator must make payments to a trust fund for the payment of benefits and medical expenses to claimants who last worked in the coal industry prior to January 1, 1970.

The trust fund is funded by an excise tax on production;

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We use surety bonds and letters of credit to provide financial assurance for certain transactions and business activities.

Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term

obligations including mine closure or reclamation costs and other miscellaneous obligations.

Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations.

The amount of security required to be obtained can change as the result of new federal or state laws, as well as changes to the factors used to calculate the bonding or security amounts.

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Climate Change

Global climate change continues to attract considerable public and scientific attention, with widespread concern about the impacts of human activity, especially the emission of greenhouse gas (“GHG”), such as carbon dioxide and methane.

Some of our operations, such as methane release resulting from met coal mining, directly emit GHGs.

Some of our operations directly emit GHGs.

Further, the products that we produce result in the release of carbon dioxide into the atmosphere by end-users.

Laws and regulations governing emissions of GHGs have been adopted by foreign governments (including the European Union and member countries), U.S.

regulatory agencies, individual states in the U.S.

and regional governmental authorities.

While Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level in recent years.

In the absence of such federal climate legislation, almost one-half of the states have taken legal measures to reduce emissions of GHGs primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs.

Congress and regulatory agencies, individual states in the U.S.

and regional governmental

In particular, in August 2022, President Biden signed the Inflation Reduction Act of 2022 ("IRA") into law.

The IRA contains billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration, amongst other provisions.

These incentives could accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for, and in turn the prices of, fossil fuel energy products.

Also, almost one-half of U.S.

states have taken legal measures to reduce emissions of GHGs primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs.

Further, numerous proposals have been made and are likely to continue to be made at the international, national, regional and state levels of government that are intended to limit emissions of GHGs by enforceable requirements and voluntary measures.

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It is unclear when a final rule will be issued and/or whether and how additional actions by the Biden Administration could impact further regulatory developments in this area.

In June 2010, Earthjustice petitioned the EPA to make a finding that emissions from coal mines may reasonably be anticipated to endanger public health and welfare, and to list them as a stationary source subject to further regulation of

On April 30, 2013, the EPA denied the petition.

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On February 12, 2021, the EPA clarified that states are not required to take any actions to develop or submit plans under the Clean Power Plan or the now-vacated replacement rule.

Also, on June 30, 2022, the Supreme Court ruled that the Clean Power Plan's generation shifting approach for emission reductions was not authorized by section 111(d) of the Clean Air Act.

The EPA is working on new rules to limit carbon emissions from power plants, which, depending on the requirements, could have a material adverse impact on the demand for thermal coal nationally.

While the above power plant rules do not affect our marketing of met coal, the continued regulatory focus could lead to future GHG regulations for the mining industry and its steelmaking customers, which ultimately could make it more difficult or costly for us to conduct our operations or adversely affect demand for our products.

Notably, in October 2021, the Supreme Court agreed to hear a case addressing the scope of the EPA's authority to regulate GHGs;

oral arguments are scheduled for February 28, 2022.

The Supreme Court's ruling in this case could have a substantial impact on the EPA's ability to regulate GHG emissions.

Demand for met coal and natural gas also may be impacted by international efforts to reduce GHG emissions.

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The text of the Paris Agreement calls for nations to undertake “ambitious efforts” to hold the increase in the global average temperature to well below 2º C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5º C above pre-industrial levels;

reach global peaking of GHG emissions as soon as possible;

reach global peaking of GHG

emissions as soon as possible;

and take action to conserve and enhance sinks and reservoirs of GHGs, among other requirements.

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On April 21, 2021, the United States announced that it was setting an economy-wide target of reducing its GHG emissions by 50-52 percent below 2005 levels in 2030.

In November 2021, in connection with the 26th session of the Conference of Parties in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce GHGs, including reducing global methane emissions by at least 30% by 2030 and ending the international public finance of new unabated coal power generation abroad by the end of 2021.

In November 2021, in connection with the 26th session of the Conference of Parties (as defined below) in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce GHGs, including reducing global methane emissions by at least 30% by 2030 and ending the international public finance of new unabated coal power generation abroad by the end of 2021.

The resulting Glasgow Climate Pact calls upon the parties to "accelerate efforts towards the phase-down of unabated coal power and phase-out inefficient fossil fuel subsidies." Furthermore, many state and local leaders have stated their intent to intensify efforts to support the international commitments.

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Finally, climate change may cause more extreme weather conditions such as more intense hurricanes, thunderstorms, tornadoes and snow or ice storms, as well as rising sea levels and increased volatility in seasonal temperatures.

Extreme weather conditions can interfere with our services and increase our costs, and damage resulting from extreme weather may not be fully

Extreme weather conditions can interfere with our services and increase our costs, and damage resulting from extreme weather may not be fully insured.

However, at this time, we are unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting our operations.

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Permits requiring regular monitoring and compliance with effluent limitations and reporting requirements govern the discharge of pollutants into regulated waters.

Our mining operations maintain water discharge permits as required under the National Pollutant Discharge Elimination System program of the CWA.

Our mining operations maintain water discharge permits as required under the NPDES program of the CWA.

We believe that we have obtained all permits required under the CWA and corresponding state laws and are in substantial compliance with such permits.

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Recent regulatory actions and court decisions have created some uncertainty over the scope of CWA jurisdiction.

On June 29, 2015, the EPA and the USACE jointly promulgated final rules redefining the scope of waters protected under the CWA, revising regulations that had been in place for more than 25 years.

The new rules could expand the scope of CWA jurisdiction, making more waters subject to the CWA’s permitting and other requirements in the case of discharges.

On June 29, 2015, the EPA and the USACE jointly promulgated final rules expanding the scope of waters protected under the CWA, revising regulations that had been in place for more than 25 years.

However, on October 22, 2019, the agencies published a final rule to repeal the 2015 rules and then, on April 21, 2020, the EPA and the USACE published a final rule replacing the 2015 rule, and significantly reducing the waters subject to federal regulation under the Clean Water Act.

On August 30, 2021, a federal court struck down the replacement rule and, on December 7, 2021, the EPA and the USACE published a proposed rule that would return to a pre-2015 definition of "waters of the United States" while the agencies continue to consult with stakeholders in both the implementation of the rules and the future regulatory actions.

Additionally, on January 24, 2022, the Supreme Court agreed to hear a case addressing the proper test for determining whether wetlands are "waters of the United States." This case would provide much needed clarification, as confusion over the scope of CWA jurisdiction has led to significant permitting delays, litigation, and uncertainty in the mining industry.

On August 30, 2021, a federal court struck down the replacement rule and, on December 30, 2022, the EPA and the USACE published a final rule that would restore water protections that were in place prior to 2015.

Meanwhile, in October 2022, the Supreme Court heard oral argument in a case addressing the proper test for determining whether wetlands are "waters of the United States." This case would provide much needed clarification, as confusion over the scope of CWA jurisdiction has led to significant permitting delays, litigation, and uncertainty in the mining industry.

Resource Conservation and Recovery Act

The Resource Conservation and Recovery Act (“RCRA”) and corresponding state laws establish standards for the management of solid and hazardous wastes generated at our various facilities.

Besides affecting current waste disposal practices, RCRA also addresses the environmental effects of certain past hazardous waste treatment, storage and disposal

Besides affecting current waste disposal practices, RCRA also addresses the environmental effects of certain past hazardous waste treatment, storage and disposal practices.

In addition, RCRA also requires certain of our facilities to evaluate and respond to any past release, or threatened release, of hazardous waste that may pose a risk to human health or the environment.

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Comprehensive Environmental Response, Compensation and Liability Act

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) and similar state laws affect our met coal mining operations by, among other things, imposing investigation and cleanup requirements for threatened or actual releases of hazardous substances.

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state laws affect our met coal mining operations by, among other things, imposing investigation and cleanup requirements for threatened or actual releases of hazardous substances.

Under CERCLA, joint and several liability may be imposed on operators, generators, site owners, lessees and others regardless of fault or the legality of the original activity that caused or resulted in the release of the hazardous substances.

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Protection of threatened, endangered and other special status species may have the effect of prohibiting or delaying us from obtaining mining permits and may include restrictions on our activities in areas containing the affected species.

Also, the designation of previously unidentified threatened, endangered or special status species in areas where we operate could cause us to incur additional costs or become subject to operating delays, restrictions or bans.

Also, the designation of previously unidentified

threatened, endangered or special status species in areas where we operate could cause us to incur additional costs or become subject to operating delays, restrictions or bans.

Our primary business is not materially impacted by seasonal fluctuations.

Demand for met coal is generally more heavily influenced by other factors such as the global economy, demand for steel, interest rates and commodity prices.

Human Capital

As of December 31, 2021, we had 704 employees, of whom 287 were hourly employees and 417 were salaried employees.

The Company prioritizes employee safety, wellbeing, personal and professional development, and diversity and inclusion.

At the direction of our Standing Committees of our Board of Directors, our human resource department is responsible for developing and executing our human capital strategy.

This includes the attraction, acquisition, development and engagement of talent to deliver on our strategy and the design of employee compensation, incentive, welfare and benefits programs.

We focus on the following factors in order to implement and develop our human capital strategy:

• Safety of Our Employees

• Evaluation of Employee Performance, Training and Talent Development

• Employee Health and Welfare

• Diversity and Inclusion

Safety of Our Employees

We incorporate safety principles into every aspect of our business.

We are proud of our safety record, which includes a safety incident rate that has consistently been over 30% better than the U.S.

industry rate and an incident severity measure that is consistently less than half the national average.

To achieve such results, we have established a culture of awareness and incident prevention through numerous safety initiatives including, among others:

• 100% compliance with required annual MSHA safety training;

• Beginning all meetings with a safety share;

• Our "Stop and Correct Authority" that we have granted all employees, contractors, and visitors, we encourage anyone who observes unsafe acts or conditions to take corrective actions;

• Our Safety ACTion training program, with monthly trainings scheduled specific to the tasks that each individual is asked to perform.

Evaluation of Employee Performance, Training and Talent Development

We strive to recruit, hire and retain a talented and diverse team of people.

Our employees are supported with training and development opportunities to pursue their career paths and to ensure compliance with our policies.

Our training program incorporates industry best practices and includes the following for new employees, among others:

code of business conduct and ethics training, driving policy, employee handbook, safety policy and work rules.

We also require the following annual trainings on certain topics among others:

Anti-Corruption and Anti-Bribery, cybersecurity, diversity and harassment, employee hazard, surface retraining, underground retraining and discipline specific retraining.

We are committed to developing and retaining our workforce.

Our employees make us who we are, and we offer tools to identify, grow and nurture our talent including:

• Future Leaders Development Program

• Annual Supervisor and Development Training

• Employee Education Assistance

• Annual Performance Evaluations

Employee Health and Welfare

Our compensation and benefits teams aim to develop and implement policies and programs that support our business goals, maintain competitiveness, promote shared fiscal responsibility among the Company and our employees, strategically align talent within our organization and reward performance, while also managing the costs of such policies and programs.

We provide our employees with competitive fixed and/or variable pay, and for eligible employees we currently provide access to medical, dental and life insurance benefits, disability coverage, 401(k) plan and employee assistance programs, among other benefits.

Collective Bargaining Agreement

Our Collective Bargaining Agreement (“CBA”) with the UMWA expired on April 1, 2021, and the UMWA initiated a strike.

We continue to negotiate in good faith with the UMWA, and we remain committed to pursuing resolution.

For more labor related information go to https://warriormetcoalfacts.com.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business