“Current indications point to a strengthening global economy. If this trend continues with regard to steel production, 2010 prices will be stronger than in 2009,” the master limited partnership said.

With about one-quarter of its coal production and 30-35% of its coal royalty revenues generated from metallurgical coal, NRP’s income will be largely affected by the fortunes of steel.

“Less certain is the current US steam market, which NRP does not believe will make a recovery until sometime in the second half of the year,” the company said.

“The steam markets will be affected by many factors, including the weather, industrial demand, and the extent of fuel switching. Stronger industrial demand due to a strengthening economy would have a positive impact on the steam coal markets.”

This year NRP anticipates flat coal production, a 2% increase in coal royalty revenue and a 10% increase in total revenues over the last guidance issued for 2009.

A large part of the increase in total revenues will be due to last year’s acquisitions. In 2009, NRP completed six acquisitions which will contribute to higher production in 2011 and 2012.

NRP anticipates a 35% increase in earnings per unit and a 10% increase in its distributable cash flow.

Coal production in 2010 is expected to be at 41-50 million tons and revenue at $US235-285 million.

NRP declared a fourth quarter 2009 distribution of 54c per unit, a 1% increase year-on-year.

Chief executive Corbin Robertson Jr said he expected to maintain the same distribution per quarter throughout 2010.