Walter Industries to Invest $19.6 Million to Resurrect Coal Mine in Alabama

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Walter Industries, Incorporated (NYSE:WLT) (Tampa, Florida) through United Land Corporation, a wholly owned subsidiary of the company, will invest up to $19.6 million in Kodiak Mining Company, LLC to operate an underground coal mine in Shelby County, Alabama. Walter Industries currently operates three other underground coal mines in Tuscaloosa, Alabama.

Kodiak Mining Company, LLC is a joint venture between United Land, who will own 51 percent, and R&S Coal, LLC, who will own the other 49 percent. R&S Coal is controlled by Jimmie R. Ryan, who contributed the mineral rights and some mining equipment to Kodiak Mining Company. Mr. Ryan will also serve as President of Kodiak.

Kodiak will have the rights to mine approximately 4.3 million tons of underground reserves per year, which can be sold as high volume, hard coking coal, or high BTU, low-sulfur steam coal. Kodiak’s operating results will be incorporated into Walter Industries’ financial statements. Walter Industries expects this investment to generate a net income of $5 million to $6 million per year beginning in 2006.

United Land Corporation will own 51 percent of the volume of coal mined, which is expected to be approximately 700,000 tons per year until the 4.3 million tons of reserves are exhausted, or new mining areas are developed. The reserves will be mined by a third-party contractor that is owned and operated by Jimmie Ryan, and will be marketed through Blue Creek Coal Sales, Incorporated another wholly owned subsidiary of Walter Industries, Inc. The coal is expected to be sold to power plants and steel companies.

Walter Industries, Inc. is a significant producer of high-quality metallurgical coal for worldwide markets, a leader in water infrastructure and water transmission products and also a leader of affordable homebuilding and financing.

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