Ramaco Resources (METC) Q3 2026 earnings review
Ramaco locks in 2027 coal sales, but fuel costs jump
Ramaco Resources, an Appalachian producer of steelmaking coal developing a Wyoming rare-earth mine, sold more coal from its stockpiles while higher fuel bills deepened its losses. Revenue grew 24% as shipments rebounded, but cash mine costs hit $104 a ton on expensive diesel and widened the net loss to $18 million. Chief executive Randall Atkins raised the full-year cost forecast, which by our math points to mine costs near $107 a ton in the fourth quarter.
| Revenue | $150.1M +24% from a year ago on stockpile sales |
|---|---|
| Cash margin per ton sold | $16/ton $23/ton a year ago as diesel doubled |
| 2027 domestic coal commitments | 1.7M tons +31% vs 2026 at $139/ton fixed |
| Full-year cash cost outlook | Raised $4.50/ton middle of the range: $102/ton |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because strong early coal bookings for 2027 were offset by rising mine costs and another small delay in the rare-earth schedule. Locking in 1.7 million tons with US steel mills at $139 a ton and pulling the Maben underground mine start into the fourth quarter strengthen next year's coal earnings. The bad news: cash and equivalents have fallen by $207 million this year, and the rare-earth pre-feasibility study and pilot plant now stretch into the second half of 2027 without committed project financing.
The question now is whether rising spot coal prices and new low-volatile mines will expand margins faster than fuel inflation eats them away. If spot prices near $191 a ton hold and the January rail facility cuts trucking bills by $20 a ton, fourth-quarter and 2027 cash generation will rebound; if diesel stays near $5.85 a gallon, unit costs will keep squeezing cash flow. Fourth-quarter realized prices on index-linked exports and the December 2027 outlook will decide it.
🐂 Bull Case
US Steel Mills Signed Early for 2027
Ramaco mines metallurgical coal, the specialised coal used to make steel, and locks in yearly fixed-price contracts with North American steelmakers every autumn. Chief executive Randall Atkins said mills turned to the miner's balance sheet to "reduce counterparty risk against other less well capitalized companies that struggled to deliver on their previously committed 2026 tons".
The company signed 1.7 million tons of domestic business for 2027 at an average fixed price of $139 a ton, plus 1.1 million tons of export commitments. Domestic volume rose 31% from the 1.3 million tons committed for 2026, while the fixed price edged up $2 a ton. Because 2.8 million tons are already booked, next year's sales start with much higher visibility, generating over $65 million in coal segment profit before interest, taxes and depreciation if mine costs stay near $100 a ton.
What to watch: initial full-year 2027 production and sales targets after the board meets in early December. That release will show how much of the remaining 2027 output stays open to rising spot prices.
Spot Coal Rebound Lets Ramaco Sell Stockpiles
Weak prices for high-volatile coal, a grade with more gas content that makes up most of Ramaco's output, have weighed on revenue all year. Rather than sell into a depressed market earlier in 2026, the miner stockpiled coal at its sites, pushing clean coal inventory to a peak of 1.1 million tons in the first quarter.
Benchmark US coal indices rose 4% in the third quarter to $174 a ton and reached $191 a ton by November. The company began selling down its stockpile into those firmer markets, lifting quarterly sales volume 23% from a year ago to 1.08 million tons even as it cut mine production 10% to 851,000 tons. Clean coal inventory dropped to 900,000 tons, though that remains more than 600,000 tons above normal levels, and management trimmed full-year production plans again to keep high-volatile supply tight.
What to watch: fourth-quarter revenue per ton on the 0.8 million export tons linked to market indices. A higher realized price will confirm that the recent index rally is flowing into cash receipts.
Low-Vol Mine Expansion Pulled Forward Into Q4
Ramaco is shifting its mining mix toward low-volatile coal, a scarcer steelmaking grade whose benchmark price in Australia jumped 35% over the past year. Production at the Berwind complex, which houses these low-volatile reserves alongside Knox Creek and Maben, was still down 22% from a year ago in the third quarter at 232,000 tons.
Management pulled the start of the first underground mining section at Maben forward into the fourth quarter of 2026 from early 2027, lifting full-year capital spending plans by $5 million while pausing share buybacks during the third quarter. Together with a third section at Berwind also starting before year-end and the earlier restart of Laurel Fork, the miner is adding nearly 1 million annualized tons of low-volatile capacity this year. A new rail loading facility at Maben will finish in January 2027 and cut trucking expenses there by roughly $20 a ton.
What to watch: Berwind complex production in the fourth-quarter report. Output turning higher after two years of declines will prove the new sections are running on schedule.
🐻 Bear Case
Diesel Inflation Pushed Mine Costs Above Plan
"Turning back to our metallurgical coal business, pricing has now moved up meaningfully more than costs," Atkins said, adding that "we anticipate stronger margin expansion in both the fourth quarter of 2026 and full-year 2027". In the third quarter's printed results and updated full-year plan, unit costs rose faster than realized coal prices.
Diesel fuel jumped to $5.85 a gallon from $2.50 at the start of the year, and steel roof-support bars rose to $952 a ton. Cash mine costs climbed $5 a ton from the second quarter to $104 a ton, outpacing a $4-a-ton rise in realized coal prices to $120 a ton. Cash margin shrank to $16 a ton from $23 a year ago, while cost of sales rose 5 percentage points of revenue.
- Q3 cash mine cost: $104 per ton, up 7% from a year ago
- Q3 cash margin: $16 per ton, down 30% from $23 a year ago
- Full-year cash cost outlook: raised to $101–103 per ton from $96–99
- Implied Q4 cash cost: about $107 per ton by our math, up 16% from a year ago
What to watch: fourth-quarter cash cost per ton sold against the $107 implied figure. A lower reading would show that mine productivity or fuel relief is offsetting inflation before the Maben rail savings arrive in January.
Wider Losses and Cash Burn Cut Liquidity
Atkins highlighted that having a revenue-producing coal business alongside a developing mineral project gives the company financial stability, and he noted that third-quarter liquidity of $375 million was up 38% from a year ago. Over the first nine months of 2026, however, operations and capital projects consumed a large share of the cash raised in late 2025.
The third-quarter net loss widened 37% from a year ago to $18.2 million, or $0.32 per Class A share, as rare-earth administrative spending of $5.9 million weighed on a thinner coal profit. Adjusted EBITDA fell 64% to $3.0 million, while quarterly capital spending more than doubled to $35.5 million. Cash and equivalents have dropped by $207 million since December to $233 million, pulling total liquidity down from $521 million at year-end.
What to watch: fourth-quarter operating cash flow and Adjusted EBITDA, which management says could beat the $6.9 million earned in the first three quarters combined if spot prices hold. Positive free cash flow would stop the steady drain on the cash balance.
Rare Earth Timeline Slips Again Without Funding
Ramaco is developing the Brook Mine in Wyoming to extract rare earths and critical minerals such as gallium, germanium and scandium from coal-bearing rock, aiming to refine them in a facility estimated in July at $3.2 billion plus $0.8 billion of contingency. Reaching commercial production in 2031 requires hitting engineering milestones and securing outside financing.
Several near-term project dates moved back another quarter in this release. The pilot plant building in Wyoming is now due in early 2027 rather than fall 2026, the geological technical report moved from year-end 2026 to the first quarter of 2027, and the pre-feasibility study by Hatch Consultants will only begin in the first quarter of 2027 for completion in the second half, rather than finishing in spring. The company remains in "advanced discussions regarding both potential domestic and international offtake transactions and third-party project financing", with no new binding agreements announced and no update on the shareholder lawsuit or Chinese export rules.
What to watch: the SK-1300 geological report and the start of the Hatch pre-feasibility study in the first quarter of 2027. Concrete customer purchase contracts or government funding commitments are needed before construction of a multi-billion-dollar refinery can be financed.
👓 Other Themes
Lab Tests, Insurance Win and Cash Dividend
Third-party laboratory tests using Ramaco's carbochlorination chemical process achieved 92% to 97% recovery rates across rare earths and semiconductor minerals, and engineers are now testing electronic waste samples as extra feedstock. Separately, a jury awarded the company $30 million plus legal fees from Chubb Insurance over a 2018 coal silo collapse, subject to post-trial motions, and the board switched the fourth-quarter Class B dividend from stock to $0.0742 per share in cash.
💲 Other KPIs
Stockpiled coal fell 6.0% from $100.4 million in the second quarter after climbing for three straight quarters. In tonnage terms, clean coal inventory dropped to 900,000 tons from a first-quarter peak of 1.1 million tons, though it still sits more than 600,000 tons above normal and ties up working capital until shipped.
Money owed by customers for delivered coal rose 41.7% from $54.4 million at the end of 2025, outpacing third-quarter revenue growth of 24.0% from a year ago. Higher late-quarter shipment volumes absorbed $22.6 million of operating cash over the first nine months, which should convert into cash as bills are collected.
By our math, total debt and finance leases of $468.5 million minus $233.8 million of total cash left net debt of $234.7 million, up from $185.4 million in the second quarter and $31.7 million at year-end 2025. The credit line remains untapped, so the increase comes entirely from spending down cash on mines and earlier share buybacks.
🔮 Guidance
Cut. The middle of the full-year mining target moved down 200,000 tons, to a 7.2% decline from 2025. By our math, that leaves 816,000 tons for the fourth quarter, down 8.5% from a year ago. It is the second cut in two quarters (0, -150,000, -200,000 tons) due to "continued production discipline in the high-vol market".
Cut. Management trimmed the top end by 200,000 tons, putting the middle of the range at 4.05 million tons, or 5.6% growth for the year. By our math, that leaves 1.03 million tons for the fourth quarter, up 9.3% from a year ago as stockpiles ship out. Second trim this year: 0, -150,000, -100,000 tons.
Raised. The cost forecast moved up $4.50 per ton at the middle of the range, to a 4.1% increase over 2025 after holding at $97.50 for three quarters. After $100 per ton in the first nine months, the new range implies about $107 per ton in the fourth quarter by our math, driven by $5.85-per-gallon diesel and higher steel bar prices.
Raised. Capital spending plans rose $5 million at the middle of the range to $99.5 million, up 54.8% from 2025, because the first underground section at Maben will start in the fourth quarter instead of early 2027. After $80.0 million spent in the first nine months, that leaves $19.5 million for the fourth quarter by our math. Second raise: $0, +$7M, +$5M.
Raised. Overhead including stock-based pay moved up $3 million at the middle of the range to $75 million, an 8.1% increase from 2025. By our math, that leaves $17.9 million for the fourth quarter, down from $19.3 million in the third quarter. Second increase this year as rare-earth staff and testing expenses grow: $0, +$2.5M, +$3.0M.
Cut. Non-cash mine write-downs dropped $4 million at the middle of the range to $70 million, up 2.7% from 2025, matching lower full-year coal production. By our math, that leaves $18.9 million for the fourth quarter against $17.6 million in the third quarter as new Berwind and Maben equipment enters service. Second cut: $0, -$3.5M, -$4.0M.
Raised. Net interest cost rose $2 million at the middle of the range to $5.5 million, still down 29.5% from 2025. Because the cash balance fell from $440 million at year-end to $233 million, interest earned on cash deposits dropped, leaving $2.3 million of net interest expense for the fourth quarter by our math.
Raised. The bottom of the normalized tax benefit rate rose 3 percentage points, lifting the middle of the range to 24% against a 22.6% tax benefit rate recorded over the first nine months of 2026 and 17% in full-year 2025.
Raised. The middle of the range rose $0.5 million to $4.0 million, up 30.8% from 2025 after earlier idlings at Laurel Fork and Stonecoal. Because the first nine months already totaled $3.7 million ($1.1 million in Q3), the middle of the plan leaves only $0.3 million for the fourth quarter by our math.
❓ Key Questions
Why does Q4 cost math point to $107 per ton?
Raising the full-year cash cost plan to $101–103 per ton after $100 per ton in the first nine months implies about $107 per ton in the fourth quarter by our math, even as higher-grade low-volatile mines start up. Does management expect diesel to stay near $5.85 a gallon?
What happened to the fall e-waste study and 2026 offtakes?
Last quarter management planned to publish an electronic-waste economic study in the fall and announce additional rare-earth customer agreements before year-end. Neither appeared in the release, and the Hatch pre-feasibility study now starts in early 2027. Are standalone e-waste economics still coming this year?
How much of the 2027 domestic book is low-volatile coal?
Ramaco locked in 1.7 million tons of 2027 North American sales at $139 per ton while adding nearly 1 million annualized tons of low-volatile capacity. Disclosing the split between low-volatile and high-volatile tons in that book would show whether the $139 price reflects a grade upgrade.
When could Ramaco collect the $30 million Chubb verdict?
A jury awarded $30 million plus legal fees for the 2018 Elk Creek silo failure, subject to post-trial motions. What is the expected timeline for post-trial rulings or appeals, and will any cash arrive in 2027 to help fund capital spending?