RICHMOND, Va., Jan 12, 2010 /PRNewswire via COMTEX/ -- Massey Energy Company (NYSE: MEE) announced today that it has begun the development of a new metallurgical coal mine within its Rowland reserve in Raleigh County, WV. The Rowland reserve consists of 56 million tons of mostly low and mid volatile metallurgical coal and is located adjacent to Massey's existing Marfork operation. The new mine is the first among several that are planned to be combined in a new mining group on the Rowland reserve. Massey estimates that the new resource group will eventually produce as much as two million tons of metallurgical coal annually and employ over 500 miners. Massey first announced its intent to develop this reserve during a conference call with investors on October 28, 2009.
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Commenting on the new project, Massey's Chairman and Chief Executive Officer Don Blankenship said, "We have the required permits in hand for the development of the slope and shaft into the main deep mine in the Beckley seam and we are now moving forward as quickly as possible. The development of this property further enhances our position as Central Appalachia's largest coal producer and one of the largest met coal producers in the country."
Massey acquired most of the Rowland reserve in 1998 and added to it with several small acquisitions in 2008. Initial development of the property and construction of the mine is expected to be completed in time for the 2011 export season.
Capital expenditures for the development of the mine in the Beckley seam and associated processing plant and facilities are expected to be in the range of $100 to $160 million. Approximately $20 to $30 million of these expenditures are planned to occur in 2010, with the remainder in 2011 and 2012. These expenditures are mostly incremental to Massey's previous capital expenditure forecasts.
"We are increasingly optimistic about the strength of the metallurgical coal markets around the world. We believe the current and forecasted shortage of metallurgical coal makes this the right time to proceed with the development of this high quality coal reserve. Further, we are confident that this investment will be significantly accretive, enabling us to deliver increasing shareholder value when production begins," Blankenship concluded.
Massey Energy Company, headquartered in Richmond, Virginia, with operations in West Virginia, Kentucky and Virginia, is the largest coal company in Central Appalachia and is included in the Standard & Poor's 500 Index.
Forward Looking Statements
FORWARD-LOOKING STATEMENTS: Certain statements in this press release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. Any forward-looking statements are also subject to a number of assumptions regarding, among other things, future economic, competitive and market conditions. These assumptions are based on facts and conditions as they exist at the time such statements are made as well as predictions as to future facts and conditions, the accurate prediction of which may be difficult and involve the assessment of circumstances or events beyond the Company's control. The Company disclaims any intent or obligation to update these forward-looking statements unless required by securities law, and the Company cautions the reader to not rely on them unduly. Caution must be exercised in relying on forward-looking statements including disclosures that use words such as "believe," "anticipate," "expect," "estimate," "intend," "may," "plan," "project," "will," and similar words or statements that are subject to risks, trends and uncertainties that could cause the Company's actual results to differ materially from the expectations expressed or implied in such forward-looking statements. Factors potentially contributing to such differences include, among others: the Company's cash flows, results of operation or financial condition; worldwide market demand for coal, electricity and steel; the successful completion of acquisition, disposition or financing transactions; future economic or capital market conditions; foreign currency fluctuations; governmental policies, laws, regulatory actions and court decisions affecting the coal industry or our customers' coal usage; competition among coal producers in the United States and internationally; inherent risks of coal mining beyond the Company's control, including weather and geologic conditions or catastrophic weather-related damage; the Company's ability to expand mining capacity; the Company's production capabilities to meet market expectations and customer requirements; the Company's ability to obtain coal from brokerage sources or contract miners in accordance with their contracts; the successful implementation of the Company's strategic plans and objectives for future operations and expansion or consolidation; the Company's assumptions and projections concerning economically recoverable coal reserve estimates; the Company's assumptions and projections regarding pension and other post-retirement benefit liabilities; the Company's interpretation and application of accounting literature related to mining specific issues; failure to receive anticipated new contracts; the Company's reliance upon and relationships with our customers and suppliers; the creditworthiness of the Company's customers and suppliers; adjustments made in price, volume or terms to existing coal supply agreements; the Company's ability to manage production costs, including labor costs; the Company's ability to timely obtain necessary supplies and equipment; the Company's ability to obtain and renew permits necessary for existing and planned operations; the availability and cost of credit, surety bonds, and letters of credit that the Company requires; the Company's ability to attract, train and retain a skilled workforce to meet replacement or expansion needs; the cost and availability of transportation for the Company's produced coal; legal and administrative proceedings, settlements, investigations and claims and the availability of insurance coverage related thereto; the lack of insurance coverage against all potential operating risk; and environmental concerns related to coal mining and combustion and the cost and perceived benefits of alternative sources of energy such as natural gas and nuclear energy.
Additional information concerning these and other factors can be found in press releases and Massey's public filings with the Securities and Exchange Commission, including Massey's Annual Report on Form 10-K for the year ended December 31, 2008, which was filed on March 2, 2009, and subsequently filed interim reports. Massey's filings are available either publicly, on the Investor Relations page of Massey's website, www.masseyenergyco.com, or upon request from Massey's Investor Relations Department: (866) 814-6512 (toll free). For further information, please visit Massey's website at www.masseyenergyco.com.
SOURCE Massey Energy Company