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BUSINESS
Alliance Resource Partners plans new mine
CHARLESTON-- Coal producer Alliance Resource Partners plans to develop a big new underground mine in West Virginia and Pennsylvania.
The Tunnel Ridge mine is expected to employ as many as 300 people and produce up to 6 million tons annually at full production in 2012, Tulsa, Okla.-based Alliance said Thursday. Alliance expects to spend up to $285 million developing the mine, which would tap 70.5 million tons of high sulfur coal reserves in Ohio County and Washington County, Pa.
The mine would rank among the largest underground operations in West Virginia, the nation's No. 2 coal producer.
"ARLP has secured coal sales commitments for 30 million tons over 10 years to support the opening of the Tunnel Ridge mine and is experiencing strong interest from other customers for the remaining production from this operation," Alliance Chief Executive Joseph Craft III said in a statement. "The decision to open the Tunnel Ridge mine enhances ARLP's position in the strategically important Northern Appalachia region and compliments our continued growth in the Illinois Basin region."
The mine also will give Alliance a far higher profile in Appalachia and coal rich West Virginia, where it has just one mine. Federal records show Alliance's Mountain View Mine in Tucker County produced almost 2.8 million tons of coal in 2007.
Most of Alliance's operations are clustered in and around western Kentucky and southern Indiana and Illinois. It also has mines in Pennsylvania and eastern Kentucky. The company produced 24.3 million tons of coal in 2007.
Strong international demand has pushed up prices this year. The spot market price of northern Appalachian coal has more than tripled to $140 a ton, from $45.75 a year ago. Illinois Basin coal, meanwhile, has risen to $83 a ton, from $32 a year ago.
Despite the strong pricing, production has remained relatively flat. Energy Information Administration figures show Appalachian coal production up 0.2 percent from a year ago. U.S. coal production is up 0.4 percent this year.
Units of Alliance fell 41 cents, or 1.1 percent, to $35.75 Thursday.
