Development will occur over four years and increase annual production capacity by approximately 2.7 million tons starting in the second half of 2008.
Jim Walter Resources recently negotiated several international coal contracts for prices in excess of $100 per short ton, FOB mine site.
These contracts represent settlements with new and existing customers for a substantial portion of next year's available met coal, and will result in nearly a 100% year-over-year increase in existing met coal contract pricing. These one-year contracts principally cover the period July 1, 2005 through June 30, 2006.
"Our positive long-term outlook on the worldwide metallurgical coal markets, bolstered by significant near-term increases in coal prices, provide us the confidence to make this investment," Walter cheif Don DeFosset said.
The expansion, which will be internally financed, is expected to result in an increase in rated production capacity to approximately 8.0 million tons when longwall mining begins. Given the long development period, the investment will be periodically monitored by the Company and its Board of Directors for continuing feasibility.
