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BUSINESS
Wise decisions help Natural Resource Partners steadily grow to billion-dollar company
This surface mine removes multiple seams from NRP reserves in Boone County, W.Va.
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HUNTINGTON -- When Nick Carter's employees at Natural Resource Partners are making decisions about buying coal property for the company, he always tells them the same thing.
"I want everyone here to manage their job as if they own the property themselves," he said. "I always ask, 'What would you do if you owned it?' And we make decisions based on that."
They tend to make very wise decisions, and their expertise has helped NRP -- a master limited partnership that owns and manages coal properties and infrastructure -- grow steadily over the years.
In fact, it has made 31 acquisitions and grown from $450 million in market capitalization in 2002, when it went public, to $2.25 billion today.
"That's about five times as much as it was," said Carter, president and CEO of NRP.
It's a success story unbeknownst to many in the Huntington community because, while NRP's operations headquarters are in an office adjacent to Pullman Plaza Hotel in Huntington, much of the company's work is done out in the field.
NRP owns holdings in 11 different states. It leases the land to coal companies, and NRP's engineers, geologists, foresters and other employees constantly disperse to different geographic areas. They visit the mines and work with lessees on issues regarding the mines and infrastructure, said Kevin Wall, vice president and chief engineer of the company. Mine infrastructure includes coal preparation plants, belt lines, rail load-outs, barge-loading facilities and necessities other than the coal reserves themselves, Carter said.
The company's strategy sounds simple enough.
"We want to do every good acquisition we can do and avoid bad acquisitions," Carter said. "We have the best staff who knows more about coal fields than anyone anywhere, and it's my job to provide them what they need to do their jobs."
Steady growth has been the result.
"We have increased distributions now 21 straight quarters. We've been public for 23," Carter said. The company is even planning to move into a larger facility that is now being constructed near the new East Hills Professional Center on U.S. 60.
The company's history goes back to 1986, when the company's Houston-based chairman, Corbin Robertson Jr., purchased 600,000 acres of co-holdings properties from CSX Minerals. The property was in West Virginia, eastern Kentucky, Maryland, Alabama and Indiana. NRP's name at the time was Western Pocahontas Properties Ltd. Partnership.
In 1992, it purchased 4.75 million acres of Burlington Northern Railroad properties, and in 2001, Western Pocahontas Properties was approached by Arch Coal and asked to consider combining its properties with theirs to form a publicly traded company called Natural Resource Partners. Arch Coal had done some research and singled out Western Pocahontas Properties as a good company to do business with, Carter said.
"It took 18 months of work, and it came to fruition in October 2002," said Carter, who has been with the company about 18 years.
The company now has more than 50 employees, with most based in Huntington and others in Logan and Davis, W.Va., Hazard and London, Ky., and Houston.
It's been an exciting time.
"We've grown significantly -- especially since 2002 but even before that," Wall said.
With so much growth in other countries and with the United States looking toward independence from foreign oil, it's an interesting time to be in the energy business, said Kevin Craig, vice president of business development for NRP.
"It's very exciting," he said. "Certainly, it's always interesting to help grow the company, and I think it plays a significant role in economic development through our acquisitions. These have led to job creation at the mining operations."
Carter says he's been in the natural resources business for 26 years and has been waiting all that time for the coal industry to be as attractive as it is. And the best part of NRP's operations is that it can enjoy some of the benefits, without the risks that the coal companies themselves have to take, and without the headaches, such as waiting for permits and delays in equipment delivery that have come with the hike in activity.
"We don't have to mine the coal. We only lease it to the companies," Carter said. And its revenue is based on gross receipts of lessees.
NRP now is expanding into the aggregates business -- sand, limestone and rock quarry. It made an acquisition in Washington state near Puget Sound.
"That's a sand and gravel operation, and we're looking at other operations in that field," Carter said. "We expect that will grow."
