For the period ended June 30, the company reported revenues of $US457.9 million, a 14.4% jump year-on-year thanks to record average coal price realizations and record coal sales volumes.

Alliance reported an 8.8% increase in prices to $56.08 per ton versus the same period last year, which it said was due to an improved pricing structure for its coal sales contracts’ higher export market sales pricing.

The River View, Pattiki and central Appalachian mines were the stars of the producer’s portfolio in the June quarter versus 2010, with coal sales volumes up 5.4% to a record 7.9 million tons while production volumes were up 8.9% to 7.5Mt.

Making a dent in its bottom line was higher operating expenses, which year-on-year rose 15.2% to $284.1 million.

Alliance cited higher materials and supplies expenses, sales-related expenses, maintenance costs and labor-related costs for the result, and officials noted increased costs from incidental production at the Tunnel Ridge mine development project also had an impact.

“ARLP remains on track to post its eleventh consecutive year of record financial performance in 2011 after once again delivering record second quarter and first half results,” president Joseph Craft III said.

“In addition to this outstanding operating performance, we recently received the permits necessary to begin construction of the Gibson South mining complex, enabling us to expand our presence into the growing international and domestic market for this higher valued, medium-sulfur coal.”

Once the Gibson South operation near Princeton, Indiana is completed Alliance will have more than 6Mt of production annually of a less than three pound SO2 product – which currently commands a premium of more than $15 per ton domestically versus the typical five-pound Illinois Basin product sold, and even more globally.

Gibson South, which will operated under Alliance’s independent operating subsidiary Gibson County Coal (South), will be an underground room and pillar mining complex and plans to utilize four continuous mining units to access about 48.4Mt of medium-sulfur coal from the Indiana No.5 coal seam.

Alliance expects to commence initial production from the mine in the third quarter of 2014 and, at full capacity, will employ 310 workers and produce 3.3Mtpa.

In the company’s outlook, Craft was optimistic and said that its focus on expanding markets had set it up well for future growth prospects.

"During the 2011 quarter we entered into new coal sales agreements for deliveries of 4.2Mt through 2016 at prices above current price realizations, bringing our total new contract commitments to approximately 9.7Mt since the beginning of this year,” he said.

“In particular, demand for ARLP's scrubber quality coal from the Illinois Basin and Northern Appalachian regions continues to show growth as the markets for these products expand both domestically and internationally.”

Alliance said its 2011 coal production would remain within the previously estimated guidance range of 31.6-32.6Mt, while sales should total 32-33Mt – most of which is committed and priced.

Looking ahead, the company has secured coal sales commitments for about 28.1Mt, 27.2Mt and 21.1Mt in 2012, 2013 and 2014, respectively. Of that, about 3Mt in 2012, 6.2Mt in 2013 and 6.6Mt in 2014 remain open to market pricing.