Company: NC
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0000789933-25-000006
Chunk: 21

Company: NACCO INDUSTRIES INC
Filing Date: 2025-03-05
Form: 10-K
Item: Item 1
Chunk 21
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ining expects to improve operating margins as well as achieve additional growth through its ongoing business development activities. New contracts and contract extensions are central to the business' organic growth strategy. The goal is to continue NAMining's ongoing expansion as a leading provider of contract mining services for customers who produce a wide variety of minerals and materials, and we expect NAMining to be a substantial contributor to operating profit over time.

The Minerals Management segment, through our Catapult business, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States that is expected to deliver near-term cash flow yields and long-term growth. As an owner of mineral and royalty interests, we are entitled to a portion of the revenues received from the production of oil, natural gas and associated natural gas liquids, typically net of post-production expenses and taxes. We are not obligated to fund drilling and completion costs, lease operating expenses or plugging and abandonment costs at the end of a well’s productive life. The current portfolio provides a strong foundation of well-positioned assets that are expected to continue to deliver solid financial results. This business model can deliver higher average operating margins over the life of a reserve than traditional oil and gas companies that bear the full cost of exploration, production and/or development. We intend to continue these activities, while at the same time evaluating investments in non-operated working interests that we believe can reliably increase cash flow and enhance overall returns. As a non-operator, we seek to diversify our investment and operational risk through participation in oil and gas wells with multiple operators across multiple basins. While the timing of returns could vary, we maintain a long-term perspective and believes the Minerals Management segment will provide unlevered after-tax returns on invested capital in the mid-teens as the business matures.

Mitigation Resources, which provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services, continues to build on the substantial foundation it has established over the past several years. Our Mitigation Resources business offers an opportunity for growth and diversification in an industry where we have a strong 

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reputation as well as substantial knowledge and expertise. In addition, Mitigation Resources is providing ecological restoration services for abandoned surface mines and was named a designated provider of abandoned mine land restoration by the State of Texas. Mitigation Resources is working to develop a protected habitat for toads in Texas, as well as pursuing additional environmental restoration projects. We believe that Mitigation Resources can provide solid rates of return on capital employed as this