International Coal Group Reduces Capital Expenditure Outlook While Moving Ahead with Construction of West Virginia Coal Mines

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Researched by Industrial Info Resources (Sugar Land, Texas). In spite of an announced reduction in capital spending, International Coal Group, Incorporated (NYSE:ICO) (Scott Depot, West Virginia) is moving ahead with two major new coal mine developments in West Virginia. ICG announced in its third quarter 2006 earnings report that capital expenditures for 2007-2009 would be cut back from previous guidance of $855 million to $650 million. Capital expenditures for 2006 are expected to be around $200 million.

Construction of the underground workings of the new 1.3 million-ton per year Beckley underground, metallurgical coal mine is underway in Eccles, West Virginia. PrepTech, Incorporated (Apollo, Pennsylvania) is designing a 550 tons per hour coal preparation plant for Beckley, which will be constructed in the spring 2007. General contractor bids are due within the next month and a contractor should be selected in December 2006.

PrepTech is also preparing prep plant bid packages for the company’s next big development project, which will be the Tygart #1 underground coal mine near Grafton, West Virginia. Tygart #1 will be a 3.8 million-ton per year bituminous coal mine, and is part of the Hillman property, which eventually could host at least three mines producing nine million tons per year. Permitting for the project is underway and construction is scheduled to begin during the second quarter of 2007 for coal production by mid-2008.

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