Right. And to put it in perspective numerically:
If thermal royalties are ~$47M/year and even a
significant price recovery drove, say, a 20-30% uplift in per-ton royalties, that's only
~$9-14M of incremental revenue — on a company generating $169M of free cash flow with a $1.66B market cap. Barely moves the needle.
The more interesting question for NRP's investment thesis is really:
- Met coal recovery — the dominant driver at ~65% of coal royalties, and prices are currently at "cyclically low levels" per management. A recovery there is far more impactful.
- Soda ash — management described the current market as "generational lows" and explicitly said 2026 will be worse. This is a real headwind as Sisecam Wyoming earnings have gone from contributing ~$60M (2022) to ~$3M (2025) in equity earnings.
- Debt retirement / distribution increase — NRP finished 2025 with only $33M of debt and management flagged an August 2026 target to retire all remaining debt and significantly increase distributions. That's probably the clearest near-term catalyst regardless of commodity prices.
- Valuation — at ~$125/unit and ~$1.66B market cap against $169M of FCF in a trough commodity environment, the FCF yield is already ~10% at cyclical lows. That's the core bull case, independent of any commodity recovery.