The company’s net income for the quarter was $US25.2 million, a 74% plummet from the $97.8 million reported in the 2008 September quarter.

For the first nine months of 2009, its net income was $40.6 million, down 86% from the 2008 boom times, when it reported $292 million for the same period.

Across its mines, Arch sold 29.1 million tons in the quarter, a 16% drop year-on-year from 34.8Mt but a slight increase of 6% from the 27.4Mt reported in the June quarter.

Average per-ton prices were $20.05, slightly down on the $20.38 reported a year ago but an improvement over last quarter’s $19.43.

"Arch's third-quarter financial results reflect an improved performance over the second quarter," chairman and chief executive Steven Leer said.

"We achieved margin expansion in each operating segment, driven by increased metallurgical coal demand in Central Appalachia and continued successful cost control across all regions. Our trading and brokerage operations also added incremental earnings in the quarter just ended."

Arch completed its $764 million acquisition of Rio Tinto’s Jacobs Ranch property on October 1, and expects transaction synergies to range between $45 million and $55 million via cost savings, administrative cost cuts and enhanced blending opportunities from the start of 2010.

"The integration of Jacobs Ranch into Black Thunder creates what we believe to be the largest single coal-mining complex in the world and further strengthens Arch's standing as a preferred, low-cost energy supplier to our nation's electric power generators,” Leer said.

"The integration process has been smooth and swift to date, and we remain on target for complete integration during the fourth quarter."

Arch expects the integrated operation to boost operational flexibility, coal quality optimization and increased output once demand improves.

To combat the tougher market conditions, Arch managed to shed 50c from the June quarter’s cash costs per ton to $10.04, while cash margin per ton lifted 20c to $2.22.

Arch president John Eaves highlighted the operational performance of two regions.

"Our Western Bituminous region overcame several challenges during the first half of the year to deliver a significant expansion in operating margin in the third quarter. Our Central Appalachian region benefited from improving metallurgical coal sales in the quarter just ended compared with the second quarter of 2009," he said.

Looking forward, Arch says it feels coal markets are in the early stages of recovery, but with high stockpiles still prevalent it will be continuing to match production levels with demand.

Arch has forecast 2009 calendar year sales of 121-125Mt, excluding coal purchased from third parties.

The company is fully committed and priced for 2009 thanks to revised volumes and sales commitments.

For next year it estimates uncommitted volumes will range between 15Mt and 25Mt.

Uncommitted volumes for 2010 are expected to be 80-90Mt. Additionally, 10Mt and 15Mt are committed for 2010 and 2011 respectively but not yet priced.

"During the third quarter, we sold additional volumes into met markets, putting us on target to sell 2 million tons into met and pulverized coal injection markets in 2009," Eaves noted.

"Additionally, we successfully shipped another vessel of steam coal to China off the West Coast in September, and continue to have discussions for supplying the fast-growing Asia-Pacific market in the future."

Eaves said the company aimed to double sales for metallurgical and PCI coal in the coming year and to compete in seaborne thermal coal markets on an “opportunistic basis”.

"In light of the 'Great Recession' of 2009, we're pleased to be profitably managing through a severe downturn in energy markets," Leer said.

“With the addition of the former Jacobs Ranch operation to our safe, environmentally responsible and low-cost operational profile, we are strongly positioned for the upturn which we believe is just beginning to be reflected in coal demand.

“Looking ahead, it's our view that ongoing supply constraints here at home and around the world – coupled with a rebound in energy demand globally – will exert upward pressure on coal prices over the long term.”