Natural Resource Partners L.P. (NRP), a master limited partnership headquartered in Houston, is a diversified natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the United States including interests in coal, industrial minerals and other natural resources. In addition, NRP owns an equity investment in Ciner Wyoming LLC, a trona-ore-mining and soda-ash-production business.
Ciner Wyoming was negatively impacted by the COVID-19 pandemic as lower demand for glass in the global auto, beverage container and construction industries reduced demand for soda ash. Revenues and other income in the fourth quarter and full year of 2020 were lower by $4.7 million and $36.4 million, respectively, as compared to the prior year periods primarily due to a combination of lower pricing and volumes sold.
Distributions received from Ciner Wyoming were lower by $6.4 million and $17.6 million in the fourth quarter and full year of 2020, respectively, as compared to prior year periods due to Ciner Wyoming’s decision to suspend distributions as announced in August 2020. While Ciner Wyoming has yet to recover to pre-COVID-19 levels, fourth quarter 2020 overall sales volumes increased 9.5% and overall production volumes increased 49.1% over the third quarter 2020 results.
NRP believes Ciner Wyoming’s facility is competitively positioned as one of the lowest cost producers of soda ash in the world, however, NRP expects the market to remain volatile as a result of ongoing uncertainties with the COVID-19 pandemic.
As previously mentioned, Ciner Wyoming suspended its quarterly distribution in August 2020 in an effort to achieve greater financial and liquidity flexibility during the COVID-19 pandemic and accordingly, did not pay quarterly distributions for the second, third or fourth quarters of 2020. Ciner Wyoming will continue to evaluate on a quarterly basis whether to reinstate the distribution. Ciner Wyoming’s ability to pay future quarterly distributions will be dependent in part on its cash reserves, liquidity, total debt levels and anticipated capital expenditures.
“While 2020 proved to be a challenging year for us all, I’m proud of the efforts and discipline of our team as they managed the business safely and effectively over the course of the year. We paid down $46 million of debt in 2020 and ended the year with $200 million of liquidity. As we look to 2021, demand for steel, energy and soda ash continues to improve and we continue to focus on maximizing unitholder value by de-levering the capital structure while maintaining strong liquidity during these uncertain times,” stated Craig Nunez, NRP’s president and chief operating officer.