During the 2006 first quarter the company satisfied the remainder of its steam coal contract obligation with Alabama Power. All coal sales for the remainder of 2006 will now be directed to the metallurgical coal market.

Steam coal sales volume, which sold at virtually no margin, totalled 0.3 million tonnes in the quarter.

JWR did benefit from higher coal prices during the first quarter, with a 52% leap in metallurgical coal prices helping it along to a first quarter revenue of $US169.1 million, up almost 56% versus the same period last year.

JWR sold 1.5Mt of coal at an average price of $97.78 per tonne, compared to 1.5Mt of coal at an average price of $64.05/t during the same period last year.

Coal cost of sales was higher in the current-year period, reflecting expected higher costs at Mine No. 5 as it nears the end of its useful life.

In addition, first quarter cost of sales were higher as a result of adverse fourth quarter geological conditions encountered in Mine No. 7 that have since been fixed.

First quarter mining production totalled 1.8Mt compared to 1.9Mt in last year's first quarter.

First quarter earnings for the entire Walter Industries Group was $35.3 million.