Greetings and welcome to Alliance Resource Partners L.P. Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. . As a reminder this conference is being recorded. It is now my pleasure to introduce Brian Cantrell, Senior Vice President and Chief Financial Officer. Thank you, you may begin.

Thank you, Daryl and welcome everyone. Earlier this morning, Alliance Resource Partners released its third quarter 2021 financial and operating results, and we will now discuss these results as well as our perspective on market conditions and outlook. Following our prepared remarks, we'll open the call to your questions. Before beginning, a reminder that some of our remarks today may include forward-looking statements, subject to a variety of risks, uncertainties, and assumptions that are contained in our filings from time to time with the Securities and Exchange Commission, and are also reflected in this morning's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, the partnership has no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law to do so. Finally, we'll also be discussing certain non-GAAP financial measures. Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of ARLP's press release, which has been posted on our website and furnished to the SEC on Form 8-K. With the required preliminaries out of the way, I'll begin with a review of our results for the quarter and then turn the call over to Joe Craft, our Chairman, President, and Chief Executive Officer, for his comments. The exceptional performance delivered by Alliance through the first half of the year continued into the 2021 quarter. As we reported earlier this morning ARLP again posted sequential increases to total revenues, net income, EBITDA, and free cash…

Thank you Brian and welcome everyone. Since our last earnings call fossil fuel prices have increased dramatically. Around the world the supply has fallen woefully short of demand. Since the beginning of this year, worldwide LNG prices have escalated four fold in Asia and Europe. The API 2 index for thermal coal prices has more than doubled as weather impacted, unreliable renewable power generation did not show up at expected levels. And utilities increasingly turn to coal in response to high natural gas prices. In the United States natural gas prices have nearly doubled causing coal fired generation and ARLP’s primary markets to jump 23% year-over-year. Coal generation could have been even higher, however supply has been limited due to numerous issues, almost none of which should be attributed to the producers of America's most abundant low cost fuel, coal. Looking forward the Biden administration’s Domestic Energy Policy Agenda combined with ESG obsessions in Europe and the United States will most likely continue to restrict growth in fossil fuel production. Absent any significant global demand destruction we expect fossil fuel prices will remain at elevated levels through next year and into 2023. We have benefited from the market up lift this year as reflected in our updated full year 2021 coal sales guidance. Assuming no delivery delays through the end of this year, coal sales volumes will be 15% higher than the pandemic impacted 2020 levels. As natural gas prices are projected to remain favorable for coal generation next year and coal stocks for our customers are at critically low levels, we are currently targeting a 6% to 12% increase in coal sales volumes in 2022 over 2021 levels to help meet the needs of the market place. ARLP has responded to rising coal demand. Our employees are working extra…

. Our first question comes from the line of Nathan Martin with the Benchmark Company. Please proceed with your questions.

Thank you. Good morning, Joe, Brian, congrats on the quarter.

Thanks, Nate, appreciate it.

Coal production, I would say came in a little later than expected. I'm guessing that's driven the decrease for your shipment guidance given the strong market we're seeing. As you guys pointed out, you most probably weren't expecting a downward revision, obviously even the revised guidance looks like it would imply a very strong fourth quarter on both the production and shipment side. Could you guys maybe talk about the factors leading to that change, is labor a factor at all there, you also mentioned some issues maybe delivery delays affecting that, maybe a little color there and then kind of looking ahead to 2022, I think that -- you guys said that shipments should be up about 6% to 12% year-over-year, can you give us an idea how you plan to increase tons there? Thank you.

Sure, yes, we have had shipments were definitely impacted by some supply chain issues from the transportation sector to where we had some planned shipments that did not occur because of the unavailability of transportation equipment. We continue to see that as a challenge going forward. We do expect to hit our guidance with fourth quarter shipments, assuming that transportation shows up. This time know we have commitments that that will happen but, we'll have to wait and see on that. As far as our production, COVID still has impacted our operations, so we did have quite a few employees that were off this past quarter that impacted production somewhat and not significantly, but it did account for some of that shortfall. We're working extra time this quarter to try to make sure that we can achieve our objectives for the year. So we are working out extra days on the weekends to try to meet that objective. In addition, starting next week, we've added a unit of production at our MC mining operation in Appalachia that will be fully staffed and producing some additional tons in the fourth quarter going into next year. So we are looking at adding some production next year that will be driven primarily by again working extra hours and extra days, as well as maybe adding a few units so that 6% to 12%. That will be largely dependent on labor force and supply chain, and we feel good about having the equipment based on what we have within our operations that that's going to be an availability issue for most people, but not for us, as far as the equipment availability I'm speaking of. Labor, we are feeling good about our ability to attract labor since we have commitments that are starting to grow over the next three years and strong support from our domestic customers that have given us sufficient signals to provide the confidence to try to bring on a unit or two. That growth right now is probably two thirds, mostly in the Illinois Basin. It is basically where the growth is, except for the MC mining that I spoke of earlier. I think that answers your questions, unless there's a follow up.

Yes, Joe no, I appreciate the color there. Absolutely. If I may kind of shifting over to the pricing side of the equation, it looks like in 2021 you guys are nearly a million tons pretty strong pricing levels. Obviously, your full year guidance moved up by about $1.60 at the midpoint. If you look at 2022, it looks like you basically doubled your committed end price tons there. Obviously you guys have such a significant portion of 2022 locked in, can you give us any idea how pricing looks like for 2022?

Well, given the view we have, it's hard to give you a price target. Say that there are still uncertainties there. The prices are continuing to be strong. We are booking some very attractive prices relative to what this year's prices are. At the same time there was quite a bit of tonnage that we booked that was earlier in the cycle. So we didn't -- we haven't been able to time everything at the top of the market, but it's safe to say that we expect revenues to be higher next year. I can't give you a precise number right now, but we feel like next year, 2022 is going to be a very attractive year relative to what we've seen the last two or three years.

Got it. I appreciate that, Joe. And then just maybe one final question. I know I asked you last quarter for your thoughts on free cash flow allocation. I think you said you'd be better positioned to answer that in the next call. Obviously, you guys felt strongly enough about what you're seeing in the markets to increase double the distribution, really. You also added some acreage in oil and gas side. I understand there is some uncertainty out there still, as you mentioned in your prepared remarks, but maybe any other color you can provide on what your priorities are from a capital allocation standpoint or with the potential step up in free cash that you guys could see next year? Thanks.

Nate, one of the uncertainties or headwind that we're looking at is just what the Biden administration is going to do. They promoted these infrastructure bills, which on the one hand tries to encourage workers with what we call true infrastructure, then they've got a social infrastructure bill that tends to ask people not to work. I don't know what's going to happen there. It's just amazing to me that for two to three months, they stick with one particular type bill and then all of a sudden everything's changing, and nobody really knows what is going to be in the bill or what the impact is going to be. I think the positive news for people in the coal business, it looks like Senator Manchin has been successful in keeping out some of the draconian measures that were in the earlier bills. But we really need to see what in the world comes out of the Biden administration this quarter heading into next year and what their reaction is going to be relative to whether it be legislation, incentivizing, alternatives, more importantly, what position are they going to take towards our financial institutions and access to capital because there have been signs recently that the Federal Reserve has been encouraging the banks not to lend to the coal industry. So we need to really assess how the Biden administration handles the rest of the year as we think about, how we allocate capital going into 2022 and beyond. I think the fundamentals are very strong, we're seeing a lot of opportunities in the oil and gas sector, we're continuing to evaluate things in the transition. Most of those things appear to have a little longer lead time instead of the immediate type acquisitions that we're continuing to spend quite a bit of time, looking in that area. So our challenges, like most people now are supply chain shortages, transportation shortages, whether the economy line regulations, inflation is a big one. So mainly COVID, I mean, what's the pandemic going to do, is it going to subside or are we going to see another wave. So there is just a lot of the different issues in front of us, but we feel like we're well-positioned to manage those going forward, and I wish I had better clarity, but like I said, the insistence on trying to pass this legislation at a time when there's already a worker shortage, I don't know how that's going to shake out.

Got it Joe. I appreciate those comments and obviously all the variables there. Just real quick, just to follow on, on the labor side of things and then the inflation which you just pointed out as well as you guys are saying, any thoughts on what that might add on the cost side going into next year?

We're hoping that our productivity improvements will offset those increases but there's definitely inflationary pressure with steel prices, natural gas prices, oil prices, labor component is small relative to some of the others that are double-digit in prices. But we thank our margins will expand next year based on the benefit of higher revenues that will more than offset any cost increases.

Perfect, that's all I had for now. Thank you guys as always for the time and best of luck in the fourth quarter.

Appreciate it Nate.

Thank you. Our next question comes from the line of Len Shed with Heights . Please proceed with your question.

Hey, good morning. Thanks for taking my call, that’s a great quarter. And I'm just wondering, some of the peers talk about that they have set a target to reduce their direct operating greenhouse gas emission targets and I'm just wondering for Alliance is there such an approach or is there anything you been working on using some low hanging maybe improve ISG?

Not sure -- it didn't come very clear to me what’s your question, could you repeat the question.

I would just like some company -- co-company talk about they are working on to reduce their greenhouse gas emissions for their operations. I am just wondering is Alliance also working on some approach to reduce your greenhouse gas emissions by operations or some other like work like that?

We're constantly looking at efficiency opportunities. We've also made some small investments in some offsets, carbon offsets on that thing, emissions from close operations which we're continuing to look at. We're looking at other credits also potentially in the forest areas, temporary area. So, it would be my response to that. Brian do you have any more.

No, nothing.

So you don't see any near-term big opportunity for you to invest something like a carbon capture to see as -- or you don't foresee any near term opportunities being there?

I think carbon capture will be more on the consumption side not on the operating side, at the utility level, which I don't really see anything in the near term on that from our existing customer base.

Got it and I also want to follow-up, when you look at 2022 do you think about -- you probably will export more than 2021 or what do you think about export market in 2022?

We do believe the export market is going be constructive, it's going to be robust, it will be there for us. I think what we have to balance is what are the demands for our domestic customers. And yeah, so it's going to be a matter of communication and commitment. We have long time -- for the longest time really rely on our domestic base and I think we're asking our customers that for new commitments to commit for three years and if they would commit for three years I think our preference would be to serve that market as opposed to be in the export market on a short-term basis. If on the other hand, we got some export customers who are willing to contract or commit multiple years also, so we're looking for long-term supply so that we can support bringing on the additional people to meet those needs.

Okay, great, thank you very much.

It could be higher, it could be lower depending on what the domestic market is.

Great, thank you.

Thank you. Our next question comes from the line of Shelly McNulty with Loomis. Please proceed with your question.

Hi, thanks. Just want to go back to your comments about kind of waiting on Biden administration and kind of concerning comments from the Fed in regards to advising banks not to lend to coal, is that kind of at this point prohibiting you from being able to come to refinance your bonds that are callable, is that would you characterize as stopping you from doing it at this point or, if you wanted to refi tomorrow, do you have banks that would be willing to act as your agents?

We think the markets are open today is not today issue. It's, trying to think through what are access to capital B, from the banks in particular when our revolver renews in a couple of years. So that's the primary concern right now. I think, the bonds, where interest rates are, and where the strength of our balance sheet is, we've gotten some favorable responses, currently. But there's just an uncertainty there that that just puts a premium on us to have a strong balance sheet. We just feel like that there's -- we just -- it's hard to know, three years from now, where the markets are going to be, given how fast they've gone up, will there be a balance or not. I mean, I'm a believer that we're going to have this supply chain disruption for a while, I just don't see anything changing that especially if the Biden administration passes this second slug of $2 trillion, that puts money in people's pockets and encourages them not to work. So if people don't show up to drive trucks at the ports or anywhere throughout the supply chain of our economy, I am just very concerned that we're going to continue to have a lot of disruption in the supply side of the business, and it could go to anything and everything. But that's an area that we're not immune to having just products coming to the goldmine as an example. I mean, it affects everything throughout the economic food chain here. So I think the policies really need to be focused on what's good for the economy, as opposed to the 2022 election, which in my opinion is what's driving their urgencies of trying to getting something past, it has nothing to do with what's right for American in my opinion, but we just have to wait and see. I can't, yeah.

Okay, got it. And to your exported tons, what is the major market that you're exporting to at this point?

So we have markets to India, and some to Europe and the Middle East, a little bit to the Far East, not a lot.

And what's the kind of breakeven that you need to see to make the margin more attractive on the export side, get a better return on…?

The price is there. I mean, the price markers are there. It's just a matter of whether we should be selling into the export market or the domestic market. And we're further challenged by the fact that we really have no supply to sell for the next two quarters, and maybe three. So when we're looking at what participation we would have in the export market, unless we can bring on these additional tons, we're looking at second half of next year. And a lot can happen in that price curve, compared to where we are today. But I still believe that there's definitely going to be opportunity from a price standpoint for us to sell into that market. It's really just a matter of where the domestic customers, would they prefer to have the ton stay in America, are they not willing to commit in the longer term, and if they don't, then we'll probably end up turning to the export market.

But on the shipments that got impacted by logistical issues that I would assume mostly just impacted the domestic shipments, not your exported shipments. So if you can't move the tons because of the domestic freight or whatnot, can you kind of move them into the export market quickly on a spot basis just to kind of get those tons, how does that work?

Yeah, the transportation is going to be impacting both domestic and export at the same time. So it's not -- there's only so many train crews, they're having employee work issues also, try to fill their seats on your train. So most of it's a labor issue for the railroads. You've got the vessels on the seas that -- it's a logistics timing issue. So again, our challenge in America is, most producers are all sold out. So it's hard to take full advantage of these high prices that you see in the near term.

Okay. And the ability to restock inventory for next year is kind of limited in the sense that some of that capacity that closed during the pandemic, is it able to quickly restart or has there been too much domestic coal capacity permanently shut because of the rhetoric of you don't want the coal anymore, how do you -- is it ever going to be possible for the utilities to restock inventory levels to a point where we have a good cushion and I know, that's dependent on the policy too but are they wanting to restock, are they comfortable with operating at these levels of inventory?

Utilities would love to be restocking right now. But they're more focused on just maintaining, they're getting the coal that they got under contract, so that they're prepared for the winner without having to run out of coal. I mean, they're very low, lowest I've seen in a long time. And so everybody's focused on trying to make sure we meet the commitments that they've made. I think, as far as restocking from a producer standpoint, yes, the pandemic did impact co-production by 20%. And once you close those operations, it is tough to bring them back. I think that thinking of new operations, I know there's couple of people out there trying to do it. But most of what we see of new productions, all metallurgical coal, there's just been an abandonment by most producers of the thermal business. We're one of the few that's committed to the thermal business, for the life of the power plants through 2035, 2040, 2045. So it's hard for people to get financing to open new thermal mines, I just don't see it happening. But there is excess capacity, because of the pandemic for people like us to where we don't have to make large investments, we just have to hire people to get to full capacity. And I think that's what most other people will be doing. Most other people that are in the thermal business are doing it the way we're doing it, and that's really just working extra hours and trying to increase your production that way, as opposed to thinking about making capital investments that would bring down supply that would have an overhang in the future.

Thank you. Our next questions come from the line of Matthew Fields with Bank of America. Please proceed with your question.

Hi, I just wanted to ask about kind of the strong balance sheet that you sort of highlighted that's sort of a continuing priority for you. Pre-pandemic unit always kind of talks about one turn of leverage, as that kind of comfortable level. And now as we, now as we get sort of into a more favorable environment for you, and you're starting to increase the distribution, we're kind of at that one turn of leverage, and it's just wanted to get a sense of where you are at this inflection point of balancing the balance sheet versus shareholder interest and kind of where you want to see the balance sheet maintained as you kind of try to address shareholders that haven't had a distribution in a while?

I think the objective is the same. I think next year probably that EBITDA is going to be higher, you're going to see that drop below that. Our concern is 2023. There's a lot of plants that are scheduled to close in the cold space. We need to see again, what the Biden policies do, not only legislatively, but from a regulatory standpoint. As to whether or not these coal plants will stay up longer or whether they will close faster. And so when we were trying to think about the transition, we need to be able to continue to make acquisitions so that our EBITDA will grow from things other than coal. So that as we look to 2030-2035, that our company has strong growth for the long term instead of trying to think that the coal business won't be around for the next 50 years, which would allow us to return to coverage ratios like we've had when we had more security, that we had a longer runway. So that, I think both the access to capital and the future demand for our product are two major issues that influence what our reserves have to be so that we can have the ability to have a strong balance sheet so that we can survive, and no matter what environment is presented to us, but at the same time still be able to return sufficient amount of cash to the shareholders, which I support strongly as a major shareholder. But we have to be prudent in looking not only for the short term, but for the intermediate term and the challenges our industry faces. And I'm hopeful that as I said in my prepared remarks, I'm hopeful that our policymakers would accept the fact that you can't replace fossil fuels overnight. And I don't know why they -- why the financial community thinks that we can, and I don't know why they can't see the need to finance fossil fuels through their transition, as opposed to saying well, I know the transition is going to occur till 2035-2040 but I'm not -- I'm going to stop lending to you tomorrow. That just doesn't make sense to me. But unfortunately, there are banks out there that are taking that position. And so it influences how we can think about our balance sheet. And therefore we can't use leverage like most other industries can. So when you look at our balance sheet, it is conservative relative to others, because we do have lenders that are shying away from the coal word, unfortunately.

So, so not -- at the risk of oversimplifying, it sounds like trying to play some offense and defense with offense being the royalty business, and then defense being kind of your strong balance sheet to in the absence of information on what the regulatory and legislative policy is going to be. And, maybe that one turn of leverage, which was a pre-pandemic level is, are you saying is that, I don't want to put words in your mouth, so is it 450 million of debt too much right now or…?

No, no, we think that that's very doable and we could even take on some more. But what I'm trying to say is, we look at different scenarios and we feel very good about the next four or five years. If markets were working, we would be having a totally different conversation. But unfortunately we've gotten government interference in markets and it goes through everything we do whether it's a Berk, whether it's the Fed, whether it's the regulatory, I mean, there's constantly whether it's the legislative giving, when and so are all these tax credits when they don't need them. I mean, they say they don't need them and yet, the government keeps going. They want to throw the $300 billion according to the last thing I read. Some people tell me that it's really going up to 600 over 20 years. I mean, when it was a year, a year or a year, now all of a sudden they think that they need to do it for 10 years, what's that all about? So yeah, so we feel like we can sustain $500 million or $600 million of debt but at the same time, we need to see how these policies impact other people's behavior towards -- it’s not what we can support it's what we can borrow at a reasonable…

What the financial institutions will allow us to do.

Yeah, so practically speaking, does that mean that, you're going to have to hold more cash on your balance sheet and depend less on a revolver, which may or may not be as available to you after 2023?

Yeah. Or we're in the process of looking at alternative markets and there are some. There are people out there that see the strong credit and realize that they were going to be there for the next 20 years. That we are solid credit, but so there are alternatives that we're looking at, we just don't have a good idea what the pricing is going to be two years from now, as opposed to the pricing today. I mean, it's attractive today, but we don't need the money today. We need it a couple of years from now when our revolver…

Are you talking about going into the private debt market or a sort of a private revolver with a non-bank institution?

Yeah, the latter.

Okay, that's very interesting, appreciate it, and good luck rest of this year and next. Thank you.

Thank you. Our next question is coming from the line of Scott Ferguson with Pacific Value. Please proceed with your questions.

Hi, guys. Just a couple questions, I'll just rattle them off and let you go. But I know you guys touched on this in an earlier question, but just ballpark the amount of tonnage you guys have booked for next year, how much was booked before this recent price run up? And then secondly, you guys in the past have mentioned investments that you guys were close to pulling the trigger or looking at that we're outside of oil and gas, are those still on the table and potential timing? So thanks, guys.

As far as the booking of business, I'd say that most of this was really pretty gradable ever since our last call. So we book some in August, September, October. So I'd say it's probably a third, a third, a third. I don't know maybe it's a little -- maybe it's something in that neighborhood be what I would guess. I haven't really looked at it that way but I would say that it's probably in that zip code of a third, a third, a third. Maybe, yeah, I don't know. Brian.

Now, that's about right. I mean, I think if you look at our committed tons at the end of the second quarter -- third quarter, compared to the end of the second quarter, we about doubled it this quarter. And then as we mentioned in the call, since the end of the third quarter we have booked another 10.7 million tons of volumes, so tough to time to market. Obviously, I think Joe's characterization that we are constantly in the market, we're constantly booking agreements at pricing that's attractive at that time, so we've definitely caught some of the uplift. I mean, the fact that we were able to increase our full year sales price realizations by $1.10 in one quarter speaks to that. But it has been occurring on a more radical basis.

And we increased last quarter, also in anticipation of some of that. So we get our -- I mean, our revenue is up, we're $150 million, I think for the year. So, we were able to capture some of that before the July call and then we add some after. As far as the acquisitions, non-fossil, what we have looked at in some of the transition type investments we're seeing significant inflation in some of the fundamental elements, to go into different aspects of the various different alternatives that we've been looking at. We still have most of the products are actually supplied from overseas, from China. So there's still been some issues on what the tariffs are going to be and not be. So, as we see the economics of what has driven the growth in some of those renewable spaces, looking forward appears to us that the costs are going to be higher that we haven't seen a desire on PPAs as an example of adjusting to that. We've also sort of formed a view that if there's going to be a fast acceleration towards wind, solar, or batteries then we think that prices are going to be better a little later than they are today. And it may be prudent to wait a while before jumping into that space, especially if there's 10-year tax credits instead of one-year tax credits. So much of what was driving the one-year deal was or trying to do something sooner than later it was because tax credits were expiring, sounds like they're going to get extended. So maybe that takes some of the urgency off and allows for participation at a better entry point and try and do something sooner compared to later.

Thank you. Our next question comes from the line of Arthur Calavritinos with ANC Capital. Please proceed with your questions.

Thank you very much, guys. Hi, it's great to see these numbers in black and white, so good for you and good for us. Question I had Joe, I'm reading all this stuff in India, three days’ worth of supply. Spain is a disaster, England had to turn on a coal plant, which is basically going to blow up but they've realized the wind doesn't blow and all this other stuff. And I was wondering if those guys have to -- they have to take their inventories worldwide. They're realizing it now, what does that mean? I mean, for you because you made a statement earlier, which caught my attention when you said you'd rather keep the coal domestically, because you want three year contracts and I get that and at some point, I got to think that guys in India, you know, pick a country are going to be like we're going to play and we're going to do this two-year contracts or something like that. And I'm sure you're probably getting phone calls from those guys. So how does this play out because I just got to think your phone is going to be ringing off the hook with guys are finally saying, okay, I'm not going to do a one year or less than year contract, I want to go longer for a certain price, because if you run out of electricity in like India, I mean, the guy running utility is going to get killed, right, I mean, in all these countries, I mean, I don't think the guys, you people get what's going on out there so just if you could just expand on that?

Yeah. So a couple of things. We, as I mentioned earlier, we are having conversation with some export customers that are willing to commit longer term. Back to your point.

Is that news to them, is that like, do they finally acquiesce and okay, well that’s the new paradigm?

Yeah, this year we actually had a customer that committed for a full year. And normally they're quarter-to-quarter, vessel-by-vessel is what we participated in. So this year, we've had actually two customers that have committed for longer-term within a year, now we're talking about even longer. I think when you look at Europe, one of the -- you're exactly right, I mean, it's sort of should be a wake-up call. But what we are seeing is now you have got oil being replacing natural gas even. These guys are trying to scramble around to try to make sure that people have enough gas for the winner. So it's -- I have never seen anything like this is all I can say.

And -- I am sorry, go ahead, I am sorry.

Yeah. But we're very focused on trying to take full benefit of what the markets give us but we feel that our best policy is to really think longer-term and short-term. And when spacing our coal industry come in, and politically, like I've mentioned before.

Oh no, it looked I mean -- I don't know what the industry would have been like if you took the pro forma closures for 2023 and you had them this year, right. And then those electrons get substituted by nat gas. I mean, I'm in Boston, nat gas in Maine is like at the terminus, there's like 20 bucks, right, we're at 550 on a Cushing. And guys still don't get this, because they look at gasoline in terms of what energy costs are, rather than electricity until it hits, which is going to start hitting in about two or three months. Can you get work, I've talked to guys, energy guys, and one of the things that have come back from some utility guys well, they worry about is the ability you guys being able to get workers an extra shift, we start a mined, because I'm sure there's a lot of guys that even though the pay would be greater, probably wouldn't want to go back because they're like, I can make more money for a year, but then the administration, all the talk this coal is going away, other than make less money and have more certainty in what I'm doing, then just go to a I mean, mine coal for a year, just wondering how tough it is?

Yeah, that's why it's important -- that's why it's important to get long-term contracts so that we can not only talk about it, but reinforce it with commitment, there's potential that we have some even longer term contracts that we're in conversations with right now. But one of the things I may have mentioned is, that there is so many whether it is last coal or not but we have one customer that actually came to our coal mines and talked to our men saying we need you, we need you for 15 years. That's how long, at a minimum, that's how long our plants are going to run. So we appreciate what you do, even though we can't commit for 15 years contractually because of company policy, but we're here to tell you that we need you. And that was very impactful. And so what we've seen is with the fortunes that have turned, and with the price signals that we have, and the opportunity to reposition our pay policies without in a way to make it more attractive, people have had a taste of going to a manufacturing job that is the same thing every day. Whereas they come to coal mine, it's different every day, every day they work they're working in a different place. And so we've had great success, we've hired over 150 people in the last quarter that had left us earlier in the year because they see the opportunity over the next several years. And as I mentioned, we were just able to recruit two shifts in Eastern Kentucky, which is amazing given the fact that we're competing against metallurgical coal guys, they're trying to hire the same folks. So we've got great benefits, we got great culture, we got great people. We feel if anybody can hire employees, it's us. So we feel that I'm sure there's other of our competitors feel the same way. But I mean, we've -- like I said, we've been able to hire that many people just in the last quarter, given the strength of these three year contracts that we've been able to secure them during that time. So we're, yeah, same time if Biden comes out and says pay people more money to stay at home.

Yeah, not everybody became a computer coder like, the two administrations ago said all the coal miners were going to become computer programmers. So yeah. Let me ask you one of the things you said something to when the utilities if they mothball a coal plant and to restart it, it doesn't happen overnight, you made a statement like that earlier on the remarks?

That was a total high, not the utilities. Not the utility. I think once a coal plant is offline, it's very, very unlikely that it will start back up. Now, having said that, there is a plant in the UK that they went back and brought out of the multiple, but it's unlikely that you'll see any coal plants that’s been closed brought back into service until the policies change. The Federal…

I'm sorry.

Unless the government says we need you like they did in 1970s when we had an energy crisis here.

Do you think, last one and I will take it with you guys offline. I got to think there's got to be a price on that gas electricity eventually. That gets people to get off your back and realize what's going on and plus like I think with Yuri super storm, the cold storm in Texas and Houston, I mean, to me that would have been a wake-up call, but it seems like we've forgotten about it. As you think, as I think about it and you think about it, is there like a price where people via electricity bills, like I said, they haven't been reset yet for the rates, they're starting to, but they haven't fully and plus we're in a seasonal low, that's the wake-up call, I mean, because I think that eventually price drives all regulations?

You think so? Yeah, yeah. When you look at fossil fuels, mostly oil and some natural gas, what it does and permeates through any and all products. This morning, I think it was Wall Street Journal had a deal on baby diapers and showing the increasing cost of baby diapers and traced it back to lumber and oil. And that's true with so many products that we use. I think that's the one thing that most people in America don't understand is all the byproducts that we use day to day that are derivative oil. But back to your question, I think it's going to take more than price. I think it's going to take blackouts before the politicians start to say, wow, I didn't know my policies were going to impact people's lives like they did in Texas where you had over 50 people die. I am afraid that that's what it's going to take to get the policymakers and the CEOs of banks and the Blackrock world will realize that the policies we are advocating here and they're going to China and they are investing over there, but they won't say a word. China is 70% coal fired generation. They got more power plants being built today than we have in existence. And they say nothing. You think that would wake up America, but…

yeah, no, you're right and unfortunate grid, it's going to take like, it's going to have to take blackouts like, I mean, in the Boston area, like in January or February when it's cold. And, you shut down electricity and manufacturing plants when I was a kid in the 70s. I think that's what happened. They just shut stuff down, and even FERC sent a notice out to the grid operators in this region. And just said, you got to store more nat gas and it's like, thanks for the warning. But people don't get it yet. You're going to need a black, you're going to do blackouts in the wintertime, or something like, unfortunately, something like that. Okay. Unfortunately. Alright, thank you very much. And I'll be back offline with you. I will call you guys. Yes. Thank you.

Thank you. Our next question has come from the line of Andrew Cosgrove with Bloomberg. Please proceed with your questions.

Hey gentlemen, thanks for taking my questions. Just one, if you could just give us an idea on where current IOB prices are today? And then I guess along the same lines would be assuming you know if you could expand if it's like the new kind of range for gas, obviously, hot month is five, but if we were to settle somewhere closer to 350, what do you think the right price for IOB coal is in that environment?

Most of the publications you see out there are showing prices in that $80 to $90 range for Illinois Basin pricing today. I think that anything above $4 can support prices and if you're just looking at coal versus gas competition, at the same time, if you start thinking about coal on coal, would drop the price down to some other price level, which we just don't see happening in 2022. It may happen towards the end of the year may not. I just feel like that it's really difficult to bring on enough volume to meet the demand. I mean, as I said in my prepared remarks, if there had been enough coal supply, we would have seen more coal consumed in the fourth quarter than what we're going to see. And so right now as far as trying to get cold and they even get Powder River Basin in the market easier, the underground mines in the East. And then you're also facing the competition of the export market like an earlier caller talked about that there are some folks that are looking more to just sell on the export market in the short-term but I can’t give you an exact price on the 350. We don't see it going to 350, it's possible, it could, but we will be definitely booked up in 2022 before that happens.

Alright, okay, I mean I think the caller as far as what you just said with anything over $4 supporting somewhere near spot is pretty telling in and of itself, so I appreciate that. I guess the other one would be if you could maybe expand on any inflation on the rails side or the bar side. And maybe if you could just refresh my memory as far as how you guys move coal down to the Gulf Coast and then anything as far as what that cost today versus where it was and where it might be going, so no on the net side for rail specifically, I guess the rules prior to what's coming up next year was around 20 bucks a ton and obviously I know we are talking about different geographies but that's going to double next year, so we are just curious what that looks like your neck in the woods?

I think on the transportation side I don't consider its really inflation as a cost push to their pricing. I think it's gorgeous, it's all really supply and demand as the. You can pay them, who's going to pay what price and what movement and we will commit. So on the domestic side, on the rail side that's usually determined by our customers and then they usually have long-term contracts and pricing associated with that. So when we think about pricing for domestic shipments in large part customers are able to maintain those prices that. Maybe back to your inflationary type levels. Then when you get into the spot market it's just based on total supply and demand at the time you are shipping. And yeah, earlier -- right now at 660 days both rail and large shipment pricing was up quite a bit to get their fair share, as I would say, of the economic grant of the higher prices. Yeah going forward, I think that we factored all those in as to how we look at what our cash flows would be. And, we are going to have a very strong 2022 unless the bottom falls out of the economy.

Okay and then just the last thing would just be around, can you just remind me where the bookings were for 2023 before 3Q, so where you exit 2Q in 2023 and I think you said you're at 15.8 million tons right now?

Right. Yeah, Brian is looking that up. If you got another question or if anybody else has one?

Yeah, I guess the other one I think you kind of answered before but the willingness from utilities is going to keep more coal on the ground from an inventory standpoint. I guess you guys kind of said that they're just really just trying to focus on what they have contract out so far and what they're focusing on those deliveries versus building up so much strategic stock piles, right?

Right, yeah, that's what I think.

Yeah and since the second quarter we booked about 8.2 million tons in the 2023.

Okay, alright that's all I had. Thank you gentleman, really appreciate and good luck for the rest of the year.

Thank you.

Thank you. There are no further questions. I'd like to turn the call back over to Brian Cantrell for any closing remarks.

Thank you Daryl, a good discussion this morning and we appreciate everybody's time as well as your continued support and interest in Alliance. Our next call to discuss our fourth quarter and full year 2021 financial and operating results is currently expected to occur in late January and we hope you will all join us again at that time. This concludes our call for today. Thanks to everyone for your participation and continued support of ARLP.

Thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day.