The St Louis-based company recorded a EBITDA of US$54.8 million compared to US$62.7 million in 2002 second quarter. Total revenues were US$403.1 million verses US$374.5 million in 2002 same period.

Coal sales rose slightly from 24.9 million tonnes in 2002 second quarter to 25.7 this quarter. Sales volumes were up 1.7 million tonnes in the company’s western operations and 1.3 million tonnes in its Eastern operations compared to the previous quarter.

“We made good progress in our cost reduction program at our eastern mines, where we reduced costs by $1.55 per ton excluding severance costs. We will continue to pursue aggressive cost reductions across all of our operations in the year's second half,” Arch CEO Steven Leer said.

The forecast for the remainder of 2003 was for breakeven results, excluding items with a loss available to common shareholders of US$11.1 million, or US$0.21 per share.

In acquisition news, Arch signed an agreement to buy Vulcan Coal Holdings LLC, which owns Triton Coal Company, for US$364 million in May. Triton is the nation's seventh largest coal producer and the operator of two mines in Wyoming's Powder River Basin.

Leer said he had started to see encouraging coal demand and pricing trends in the market place, pointing to a rebound in the US coal industry.

“Until recently, excess coal inventories at U.S. power plants had dampened the market's response to these broad trends. However, Arch estimates that utility stockpiles are currently 10% to 15% lower than at the same time last year,” Leer said.

"We believe that the inventory correction that has been under way at U.S. power plants since early last year is nearing an end.

“In coming months, we expect growing electricity demand to boost customer fuel requirements, and that should provide an impetus for improving coal demand and pricing."

Arch Coal has subsidiary operations in West Virginia, Kentucky, Virginia, Wyoming, Colorado and Utah where it produces fuel for approximately 6% of the electricity generated in the United States.