Company: NC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000789933-25-000102
Chunk: 47

Company: NACCO INDUSTRIES INC
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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 Mining segment, operated by North American Coal, constitutes the foundation of our business, anchored by our long-term mining contracts. We anticipate steady customer demand for the remainder of 2025 and in 2026 at the 

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unconsolidated mining operations. At MLMC, fourth-quarter 2025 results are expected to improve over 2024 due to operational efficiencies. However, this improvement is not expected to offset the effect of the reduction in the 2025 contractually determined per ton sales price, causing MLMC's and the Utility Coal Mining segment's 2025 full-year results to decline compared with 2024. Looking ahead, we expect improving profitability for this segment in 2026, driven by anticipated improvements at MLMC in both sales price and cost per ton delivered, particularly if the customer's power plant is able to operate more consistently.

The Contract Mining segment, operated by North American Mining, represents our mining growth platform. Our expanding pipeline of potential deals and continued engagement with customers position this segment as a key pillar for future growth. Through ongoing geographic and mineral expansion, we are building a growing portfolio of long-term contracts. As an example, North American Mining executed a multi-year contract in October 2025 to provide dragline services as part of a project to construct an embankment dam in Palm Beach County, Florida. This project should be accretive to earnings beginning in the second quarter of 2026.

Sawtooth, a North American Mining subsidiary, is the exclusive provider of comprehensive mining services at Thacker Pass, which is owned by a joint venture between Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) and General Motors Holdings LLC. The U.S. Department of Energy also holds warrants to purchase five percent non-voting, non-transferable equity in this joint venture. Sawtooth will supply all of the lithium-bearing ore requirements for our customer's Thacker Pass lithium processing facility, which is currently under construction. This project is currently providing stable income during the construction phase and will contribute enhanced income and long-term cash flows once lithium production commences. Phase 1 lithium production is estimated to begin in late 2027.

While overall customer demand within the Contract Mining segment is expected to increase year-over-year, profitability improvements in the 2025 fourth quarter are expected to be driven by operational efficiencies partly offset by elevated operating expenses. Momentum from the strong full-year 2025 results and operational efficiencies is expected to accelerate in 2026. These factors, combined