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Note 9 - Mineral Rights, Net

12 Months Ended

Dec. 31, 2024

Mineral Industries Disclosures [Text Block]

9. Mineral Rights, Net

The Partnership’s mineral rights consist of the following:

	*December 31,*
	*2024*							*2023*
(In thousands)	*Carrying Value*		*Accumulated Depletion*			*Net Book Value*		*Carrying Value*		*Accumulated Depletion*			*Net Book Value*
Coal properties	$	660,961	$	(299,404	)	$	361,557	$	661,256	$	(285,470	)	$	375,786
Aggregates properties		8,655		(4,065	)		4,590		8,655		(3,761	)		4,894
Oil and gas royalty properties		12,354		(10,394	)		1,960		12,354		(10,082	)		2,272
Other		13,143		(1,612	)		11,531		13,143		(1,612	)		11,531
Total mineral rights, net	$	695,113	$	(315,475	)	$	379,638	$	695,408	$	(300,925	)	$	394,483

Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income and totaled $14.8 million, $17.3 million and $20.9 million for the year ended December 31, 2024, 2023 and 2022, respectively.

During the year ended December 31, 2024, the Partnership recorded a gain $4.8 million, included in gain on asset sales and disposals on the Consolidated Statements of Comprehensive Income primarily related to a coal property condemnation in the second quarter of 2024. During the years ended December 31, 2023 and 2022, the Partnership had $3.0 million and $1.1 million, respectively, included in gains on asset sales and disposals on the Consolidated Statements of Comprehensive Income.

Impairment of Mineral Rights

During the years ended December 31, 2024, 2023 and 2022, the Partnership identified facts and circumstances that indicated that the carrying value of certain of its mineral rights exceed future cash flows from those assets and recorded non-cash impairment expense included in asset impairments on the Consolidated Statements of Comprehensive Income as follows:

	*For the Year Ended December 31,*
(In thousands)	*2024*		*2023*		*2022*
Coal properties ⁽¹⁾	$	87	$	556	$	4,365
Aggregates properties		—		—		92
Total	$	87	$	556	$	4,457

⁽¹⁾

The Partnership recorded $0.1 million and $0.6 million of impairment expense during the year ended December 31, 2024 and 2023, respectively. The Partnership recorded $4.4 million of impairment expense during the year ended December 31, 2022 primarily related to assets whose undiscounted future net cash flows were less than their net book values. Of this amount, $2.6 million of impairment expense related to an asset with $4.3 million of net book value, resulting in a fair value of $1.7 million at December 31, 2022. The fair value of the impaired asset at December 31, 2022 was calculated using a discount rate of 15%.

NRP compared the net book value of its mineral rights to estimated undiscounted future net cash flows. If the net book value exceeded the undiscounted future cash flows, the Partnership recorded an impairment for the excess of the net book value over fair value. A discounted cash flow model was used to estimate the level 3 fair value. Significant inputs used to determine fair value include estimates of future cash flows from coal sales and minimum payments, discount rate and useful economic life. Estimated cash flows are the product of a process that began with current realized pricing as of the measurement date and included an adjustment for risk related to the future realization of cash flows. The impairment recorded during the year ended December 31, 2022 was based on the estimated fair value of the assets versus its net book value and is a level 3 non-recurring fair value estimate.