Alliance Resource Partners Opens River View Coal Mine in Kentucky

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Researched by Industrial Info Resources (Sugar Land, Texas)--Alliance Resource Partners LP (NASDAQ:ARLP) (Tulsa, Oklahoma) will hold the mine-opening, ribbon-cutting ceremony for the company's grassroot River View coal mine in Waverly, Kentucky, today. Production at the mine began in August, although full capacity will not be reached until mid-2010. Speaking at the 2009 Master Limited Partnership Investor Conference in Greenwich, Connecticut, Alliance Resource Partners President and CEO Joseph W. Craft III said that the project was moving "full steam ahead" and that all of the mine's eight room-and-pillar mining units would be in place next year. When running at full capacity, the mine will be able to produce 6.4 million tons of coal per year. The mine has estimated coal reserves of 105.4 million tons.

At the MLP Conference, although acknowledging a recent slowdown in coal consumption, Craft was quite upbeat about the future market for coal. "Everyone agrees that we have to have a significant role for coal in our future energy picture, especially if we're concerned about energy independence. ...Coal continues to be consumed at a rapid pace in the world economy. Over the next 15 years, it's still expected to exceed the growth of all other forms of energy. Again, the primary benefit is it is abundant, and it is low-cost compared to the alternatives. Another factor is the pricing is typically relatively stable compared to other forms of energy."

In addition to the $275 million River View mine, Industrial Info is currently tracking more than $550 million of other Alliance Resource Partners projects. Also currently under construction is the Tunnel Ridge mine in Tridelphia, West Virginia. Although initially planned for completion by the end of 2010, construction of the $285 million mine has been moving at a slower pace to allow the coal market to rebound from the economic slowdown before full production begins. "The industry itself has had a 14% drop in coal-fired generation in the East, and that's really driven by the industrial load, which has basically been nonexistent during this year," said Craft. The Tunnel Ridge mine, which will have a production capacity of 6 million tons per year, is now scheduled to begin initial production in late 2011. Speaking of the project, Craft said, "Instead of working three shifts a day, seven days a week, we basically have gone to one shift a day to slow that development down. With the one-shift-a-day production timetable, we will have the longwall [mine] operational in the fourth quarter of 2011." Information on these and other Metals & Minerals Industry projects can be found in Industrial Info's North American Industrial Database.

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