Alliance Coal Expands Eastern U.S. Coal Production

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Construction of flue gas desulfurization scrubbers at power plants in the east, due to Clean Air Act mandates, and an increase in demand for coal in general is laying the groundwork for new mining developments for high sulfur coal. Such is the case for Alliance Coal LLC, the operating subsidiary of Alliance Resource Partners, LP (NASDAQ:ARLP ) (Tulsa, Oklahoma). About 52% of the coal that the company produces from its eight mining complexes in the Illinois Basin, Eastern Kentucky, and Maryland is of the high sulfur variety. Alliance Coal produced 20.4 million tons in 2004 and is projected to produce close to 21.7 million tons in 2005. The company is currently developing four new high sulfur coal mines in West Virginia, Indiana, and Kentucky, which would add an additional 15 million tons per year when they become operational by 2009. The total capital cost for these projects is in the neighborhood of $350 million.

Alliance Coal subsidiary, Mettiki Coal LLC (Oakland, Maryland) is completing the construction of the new Mountain View underground mine in Tucker County, West Virginia. Formerly known as the mine "E" addition, Industrialinfo.com has been tracking this $35 million project since early 2001. The new Mountain View mine is designed to replace production from Mettiki’s operating 2.5 million tons per year mine "D" near Oakland, Maryland, and includes construction of a 14,000’ electrical transmission line and 5,000kva electrical substation.

The flagship project for the company is the $200 million tunnel ridge mine and preparation plant near Wheeling, West Virginia. First reported by Industrialinfo.com in 2001, the Tunnel Ridge mine will be a six million ton per year operation with a 2,000-ton per year preparation plant.

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