# USLM Energy and the Vertical Kiln Energy is USLM's largest variable cost. A new kiln should add capacity and cut energy per ton by about 30%. ## The kiln | | Old preheater rotary kilns | New vertical shaft kiln | |---|---|---| | Energy per ton of quicklime | ~4.8 GJ | ~3.4 GJ | | Cost | — | ~$65M | | Planned start | — | Summer 2026 | - Source: thesis, from company disclosures.^[Colubeat Investment Desk, 28 May 2026, https://colubeatid.substack.com/p/united-states-lime-and-minerals-inc] - 4.8 GJ is about the heat in 160 kg of coal per ton. ## Status (filings) - Q2 2026: ~$58M of the $65M spent. Still "nearing completion".^[https://quartr.com/events/united-states-lime-minerals-inc-uslm-q2-2026_FGDlHJNC] - Q3 2026: kiln made quicklime only intermittently. Final commissioning moved to Q4 2026. The plant had production inefficiencies while integrating it.^[https://www.sec.gov/Archives/edgar/data/0000082020/000110465926120712/uslm-20260930x10q.htm] > [!warning] Late, not broken > The start slipped from summer to Q4. Watch Q4 and Q1 2027 margins for proof the 3.4 GJ design figure holds. ## Fuel exposure - USLM can burn gas, coal or petroleum coke. It switches by relative price. - It buys gas linked to Waha Hub in the Permian. Waha gas is often cheap because pipelines are full. - The size of this advantage is not public. The source says so too. - Diesel is a separate cost. Q3 2026 gross profit fell 2.7% mainly on diesel and freight.^[https://www.sec.gov/Archives/edgar/data/0000082020/000110465926120712/uslm-20260930x10q.htm] ## Operating leverage - When energy rises and volume falls together, profit falls faster than revenue. - Q1 2026: revenue −3.7%, gross profit −9.5%. ---- tags: #boat #investing links: [[United States Lime and Minerals MOC]] [[How Lime Is Made]] [[USLM End Markets]]