Alliance Resource Partners: 3 Key Takeaways for Long-Term Investors

ARLP posted Q3 2026 net income of $140 million, and the print leaned on cost control and royalties rather than coal pricing. Per-ton mining costs fell 13.1% year over year, widening margins even as coal prices declined.

Three developments shaped the quarter:

• ▸Metiki mine reopening: ARLP restarted the Metiki coal mine and secured a new multiyear supply contract that adds 550,000 tons in 2027.
• ▸Cost reduction: The 13.1% drop in per-ton costs did the heavy lifting on profitability. Interpretation: the margin story here is driven by operations, not by market pricing, which cuts the partnership's exposure to softer coal prices.
• ▸Royalty record: Oil and gas royalty revenues hit a record $59.8 million, attributed to the AllDale acquisition. That gives ARLP an income stream outside the coal business.

Forward visibility is solid. Management has 31.7 million tons of coal already committed for 2027 and says it has capacity to capture additional demand. Interpretation: committed volume of that size reduces near-term volume risk, while uncommitted capacity leaves room for upside if demand firms.