Earnings were $US170.4 million for 2007 versus its 2006 final of $172.9 million, impacted by the final quarter's net income of $39.9 million - down quarter-for-quarter from $45.5 million in 2006.

Revenues for the 2007 final quarter were also down 4.1%, from $263.2 million in the 2006 corresponding quarter to 2007 results of $252.4 million. Officials cited a reduction in sold coal and other issues, such as synfuel-related revenues that were impacted by higher average coal sales prices, for the figures.

However, company president Joseph Craft III noted the year's bottom line was the seventh consecutive annual record for production volumes, coal sales, revenues, and earnings before interest, taxes, depreciation and amortisation (EBITDA).

"I am particularly gratified that all of these achievements were accomplished while completing 2007 as one of our safest years on record," he said of the operations held as part of a master limited partnership.

The company also noted a decrease in final 2007 quarter operating expenses but an overall increase for the year. Results for the 2007 quarter were $163.3 million, down quarter-over-quarter from $172.7 million in 2006, primarily due to lower sales volumes and a reduction in workers compensation expenses.

Higher costs at its Mettiki mine as it crossed over from mining in Maryland to mining in West Virginia also impacted the totals.

However, high costs such as compliance, labour expenses and materials supply played a role in the year's comprehensive increase to $685.1 million from $627.8 million last year.

With acquisitions and large-scale products at its holdings, capital expenditures for the year totalled $172.9 million, Alliance said Friday.

"Major investments during 2007 included the Providence reserve acquisition, which added approximately 87 million tons of mineable coal reserves in western Kentucky; completion of the rail load out facility and a new portal and air shaft at the Gibson County mine; commencement of slope and shaft construction at the River View mine development; and additional mining units at the Elk Creek mine," it said.

Infrastructure improvements and efficiency projects at its Warrior and Mountain View mines, Tunnel Ridge project developments and compliance expenses also contributed to costs.

Looking ahead, Craft said the global market and production increases will both be positive for Alliance in the coming year.

"Buoyed by continuing robust demand from international coal purchases and increasing commitments by utilities for high sulfur coal to supply scheduled scrubber installations, demand for ARLP's quality of coal remains strong in the markets we serve," Craft said.

That includes production unit additions made at its western Kentucky operations during the final quarter of 2007.

"To meet additional customer demand in that market, we will further increase production capacity by adding an additional production unit at these operations during the first quarter of 2008," Craft said.

"As a result of these capacity expansions, we currently anticipate coal production in 2008 will increase by approximately 8 percent to 10 percent over 2007 production levels.

"In addition, discussions with customers continue to advance toward securing the coal sales commitments necessary to timely execute on our organic growth projects."

Alliance said it anticipated 2008 coal production to be between 26.2Mt and 26.7Mt.

It has secured sales commitments for about 18.9Mt next year, 15.5Mt in 2010 and 12.1Mt in 2011, which leaves a balance of 8.3Mt, 9.7Mt and 9.7Mt for those respective years in order to keep the company open to market pricing during those periods.

"ARLP is currently estimating 2008 operating expenses per ton will be comparable to 2007 levels," Alliance said.

"The lower costs for producing the incremental tons discussed above are expected to offset anticipated cost increases attributable to labour and benefits, maintenance, regulatory compliance, and materials and supplies."