The result was due to Foundation producing and shipping more coal at price realisations 20% higher.

The company more than doubled its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) to $US82 million, reversing a net loss of a year ago.

Coal sales revenues increased 33% to $US333.5 million, with shipments from the Powder River Basin at a record level of 11.5 million tons as rail performance improved significantly despite ongoing maintenance.

For the first nine months of the year, coal sales revenues increased 32%.

The total cost of coal sales in the third quarter 2005 increased only 4% from the pro forma third quarter of 2004.

“Foundation Coal delivered its strongest quarter of operational and financial results so far this year," said James F Roberts, president and chief executive.

During the quarter all mobile equipment for the 5 million ton per annum expansion at the Belle Ayr Mine was delivered on-site and is now operational. The company expects the rail loop upgrade to be complete in November.

The Belle Ayr mine also achieved a major safety milestone – two years without any lost-time accidents.

Roberts said Foundation expected coal and energy market fundamentals to remain healthy, with demand for coal to continue to outpace supply in most markets in the short term.

“Helping secure coal's future over the longer term are the construction of new coal-based generating plants and the development of new coal-based technologies fostered by both the Energy Policy Act of 2005 and the expected continuance of historically high prices for natural gas and crude oil,” he said.

Foundation expects fourth-quarter results to be affected by factors such as the scheduled longwall move at Cumberland and historical workforce absenteeism around the holidays.

Almost all of next year's anticipated coal production is locked into contracts, as well as three-quarters of 2007's production and about half of 2008's output.

For the year, the company raised its earnings outlook to a range of $1.55 to $1.65 per share from a range of $1.30 to $1.50 per share previously.