Alpha Natural cuts forecast for coal shipments

AP News
Posted: Sep 21, 2011 8:41 AM
Alpha Natural cuts forecast for coal shipments

Alpha Natural Resources Inc. said Wednesday that it will ship less coal this year than previously estimated because of an unexpected drop in demand from Asia and production shortfalls at some U.S. mines.

Shares dropped $2.41, or 9 percent, to $24.51 in premarket trading.

Alpha now expects to ship between 102.5 million and 109.5 million tons this year, down from a previous estimate of between 104 million and 112 million tons.

The Abingdon, Va., coal miner said shipments to Asia of metallurgical coal, which is used in steel-making, are falling because of "unexpectedly curtailed customer activity levels." Overall shipments of metallurgical coal from Alpha's eastern mines are going to be 500,000 tons below previous expectations.

Alpha also said production from some Central Appalachian mines acquired in the purchase of Massey Energy this year is lower than expected. Output has also been below expectations at the Emerald mine near Waynesburg, Pa.

In addition, one of Alpha' export customers broke a contract.

Because of the lower than expected shipments, Alpha said expenses should be between $77 and $79 per ton for the third quarter and $73 to $76 per ton for the year.

Alpha plans to revise its 2012 financial and operations forecasts when it reports its third quarter results.

Shares of other coal mining companies also fell in premarket trading. Peabody Energy dropped $1.30, or 3 percent, to $41.60, and Consol Energy shares slipped 99 cents, or 2.5 percent, to $39.38.