Company investor relations director Roger Hendriksen told International Longwall News the reserves east of the Ohio River are in an area just north of Moundsville, which provides strategically vital river transportation access.

The deal, inked for an up-front cash consideration of $US2.8 million, includes gas and oil rights within approximately 15,000 acres of land as well as a commitment to a long-term lease for the operator.

However, "there are no immediate plans to develop these reserves," said Hendriksen. Massey's Northern Appalachia reserve holdings now total about 100Mt.

Said Massey chairman Don Blankenship of the move: "We are very pleased to expand our position in Northern Appalachia. This region is becoming increasingly important to the coal and energy industry, and this transaction will enable us to take advantage of the growth in demand for Northern Appalachian coal.

"Additionally, the location of these reserves, with access to the Ohio River, provides key strategic and logistical advantages which add significantly to their value."

Hendriksen told ILN the owners of the remaining 50% of the reserves have asked not to be publicly named.

In late October, the producer said it will undergo a significant expansion that will up its annual production by 8Mt by 2010 as part of an ambitious two-year plan.

"Development of these newly acquired reserves was not a part of those previously announced plans," company officials noted Friday.

The other initiative will ramp up output beginning in 2008 and 2009 and increase its market share going forward while it also focuses on cost reduction.

The producer currently holds double the market share in the region over its nearest competitor.