Consol pointed to adverse geologic conditions at Mine 84 in Pennsylvania and a roof fall at Buchanan Mine in Virginia as the main perpetrators for the decline in coal production.
The company has readjusted its targeted production for the quarter ending September 2004 to 15.2 to 15.6 million tons compared with the previous forecast of 16.6 to 17.2Mt. Total production for July was 3.9Mt compared to 4.2Mt in July last year.
Consol is now re-evaluating its outlook for full year results as it anticipated third quarter shortfall will not be made up in the remainder of 2004. Loss for the quarter is forecast to be US$0.30 to $0.40 per diluted share compared with previous profit forecasts of $0.05 to $0.10 per diluted share.
"The revised third quarter production forecast is disappointing," said Consol CEO J. Brett Harvey. However, he was optimistic the fourth quarter would be the company’s best coal production quarter as expansion projects came onto line.
Adverse geologic conditions at Mine 84 are expected to persist during the remainder of the third quarter, which will result in reduced production and increased mining and maintenance costs.
Accordingly, Consol will adjust the next three longwall panels at Mine 84 to avoid the adverse geologic areas. When mining is complete in the current panel, the longwall shields will be altered to improve operating performance.
A shortfall in production at the Buchanan Mine resulted from the scheduled longwall move in July taking longer than expected.
During August, McElroy Mine experienced a roof fall on the main line haulage, resulting in the shut down of both its longwall mining systems for one week. In addition, the second longwall at McElroy, which started up in August as part of a previously announced two-year expansion project, did not produce expected tonnages in its first week of operation because of unanticipated problems with the belt haulage system.
In July, Shoemaker Mine experienced a roof fall along its mainline rail haulage system, reducing production relative to the earlier forecast and compared with July 2003.
Several other mines have experienced equipment problems or geologic problems, and the company's contract mines in eastern Kentucky have experienced labor shortages and permit delays that have reduced the number of shifts that can be worked.
