Consol reported net income of $6.8 million for the fourth quarter compared to $115.3 million in the same period last year. Consol was also hit by higher DD&A charges related to the purchase of AMVEST.

Despite the impact of Buchanan, other mines had better performances with three longwalls setting production records. During 2007 Enlow Fork produced 11.22 million tons, Loveridge reached 6.64Mt and Robinson Run produced 6.5Mt.

Total production for 2007 was 64.6Mt, with 15.8Mt produced in the December quarter.

Consol's operations also established new safety records with an incidence rate (injuries per 200,000 hours of worker exposure) of 2.98. The industry incidence rate for underground bituminous coal mines was 6.95 through the first nine months of 2007.

This year Consol plans to capitalise on demand for steam coal, particularly out of Europe.

China net importer status, combined with weather problems in Australia, Columbia and India, and rail issues in Russia and South Africa have exacerbated coal shortages.

Consol said its Appalachian mines were perfectly placed to take advantage of this trend, servicing European customers with coal from its Northern Appalachian mines and exporting out of its wholly-owned Baltimore Port.

In 2007 it increased exports through the terminal by 20% and expects to increase by a further 25% in 2008. The port has a capacity of 12Mtpa.

"In the past few months, we have signed several international transactions for high-Btu, steam coal, with term lengths of two or three years, something we have not seen since the 1970s. With the strength of global coal demand expected to continue unabated this year, we could sign additional international contracts for steam coal this year with durations of seven to 10 years," Consol chief Brett Harvey said.

Harvey said increased demand could be met through expanding existing mines and efficiency projects.

Consol has identified several mines where longwall face extensions can be implemented.

He said Consol had identified two mines, Bailey and Robinson Run, where an additional longwall mining system could be added. Each additional longwall mining system could increase annual production by 5-6.5Mtpa.

In addition, the company said it had 6-7Mt of idled capacity which could be brought online if market prices justify the action.

CONSOL expects to complete the upgrade of the underground haulage system at the idled Shoemaker Mine in the fourth quarter of 2009. Shoemaker, located on the Upper Ohio River in Northern West Virginia, is close to several coal-fired power units scheduled to be scrubbed by 2010.

In addition, the company has idle capacity at its Miller Creek operations in southern West Virginia that could be restarted if market prices continue to rise.

"During the next 10 years, we can bring an additional 22 million tons of Appalachian production online," Harvey said.

Looking ahead, Consol said it expected to produce 68-72Mt in 2008, and 76.7-80.7 by 2011.