Walter on a high

A GREAT performance by Walter Industries’ Mine No. 7 longwall positioned the US miner to almost double revenues and more than triple operating income in the December quarter.
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No. 7 Mine, courtsey Jim Walter Resources.

Angie Tomlinson

The company posted a net income of $US240.3 million during the December quarter, and a full year net income of $346.6 million.

“The quality of our Blue Creek coal continues to provide stability in our core metallurgical coal business, despite difficult conditions in the global steel industry,” Walter Industries chairman Michael Tokarz said.

Walter attributed the impressive results to the record metallurgical coal and coke pricing. The results, however, were partially offset by higher production costs and the effect of unusual items.

Metallurgical coal sales were 1.7 million tons in the fourth quarter at an average selling price of $167.19 per short ton Free-On-Board Port.

“For the full year 2008, our metallurgical coal mines produced record tonnage, with the No. 7 Mine producing more than a million tons in the fourth quarter as a result of the addition of the Southwest A longwall,” chief executive officer George Richmond said.

Metallurgical coal production at Mine No. 4 was about 700,000t000 ton, contributing to a record 3.2Mt for the full year.

First quarter 2009 metallurgical coal sales will be cut by 250,000t due to concerns about the availability of coal at the Port of Mobile due to a two-week rail disruption.

Anticipated metallurgical coal margins reflect the expected mix of pricing in the first quarter with some higher-priced tons moved into the second half of the year.

Metallurgical coal output is anticipated to be 1.7-1.9Mt.

Production is expected to remain stable, but Walter said given current market conditions, it will delay the start up of the Mine No. 7 East expansion until at least September this year.

“The company will continue to monitor the market closely to determine an appropriate start date for this project,” Walter said.

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