Alpha Natural Resources Revises 2010 and 2011 Shipment and Cost Guidance, Increases Anticipated 2011 Metallurgical Coal Shipments
Alpha Natural Resources, Inc, a leading U.S. coal producer, today announced that 2010 Eastern metallurgical coal shipments were 11.9 million tons, Eastern steam coal shipments were 24.0 million tons, and Western steam coal shipments were 49.0 million tons. Alpha’s cost of coal sales in the East for the full year 2010 is expected to range from $60.50 to $61.50 per ton, above the previous guidance range of $57.00 to $58.50 per ton. Cost of coal sales in the West is expected to be between $8.50 and $8.60 per ton, near the low end of previous guidance range of $8.50 to $8.90.
“Our operating results in the East were impacted by several factors, including poor rail service, severe weather and delayed export shipments at the ports during the fourth quarter, as well as reduced shipments and resultant higher per ton costs from our Pittsburgh #8 mines primarily due to periodic sandstone intrusions encountered at our Emerald Mine,” said Kevin Crutchfield, Alpha’s chief executive officer. “Looking forward to 2011, the recent flooding in Queensland, Australia has significantly strengthened the market for metallurgical coal. In this environment, we anticipate that Alpha will be able to increase its 2011 metallurgical coal shipments to a range of 13.0 million tons to 14.5 million tons, compared to our previous guidance of 11.5 million tons to 13.5 million tons. As a leading supplier and exporter of metallurgical coal in the United States, Alpha expects to benefit from the combination of a strong seaborne metallurgical coal market and increased metallurgical shipments. Consequently, Alpha expects to deliver record financial results in 2011, following a record year in 2010.”
For the year 2010, Alpha currently expects average realizations per ton for Eastern and Western steam coal to be $67.07 and $10.95, respectively. The average realization per ton for Eastern metallurgical coal is expected to be $113.89, including approximately 255,000 tons of Pittsburgh #8 coal shipped into the metallurgical market.
Additionally, Alpha is revising its 2011 guidance for shipments, average realizations and costs of coal sales per ton. Guidance for Eastern metallurgical coal shipments has been increased to a range of 13.0 million tons to 14.5 million tons. Guidance for Eastern steam shipments has been decreased to a range of 22.0 million tons to 25.0 million tons, and guidance for Western steam coal shipments remains unchanged at 48.0 million tons to 52.0 million tons. Based on the 13.75 million ton midpoint of shipment guidance, 67% of Alpha’s anticipated 2011 metallurgical coal shipments had been committed and priced as of January 13, 2011 at an average per ton realization of approximately $142.03, including more than 600,000 tons of Pittsburgh #8 coal and approximately 600,000 tons of PCI coal. As of the same date, 91% of the midpoint of Alpha’s 2011 Eastern steam coal shipment guidance had been committed and priced at an average per ton realization of $65.53, and Alpha’s Western steam coal remains fully committed and priced based on the midpoint of shipment guidance at an average per ton realization of $11.82. The cost of coal sales per ton in 2011 are expected to range from $62.00 to $66.00 in the East and $9.25 to $9.75 in the West.
