The producer’s revenues took a 61% jump to $US33.5 million in the third quarter, with tons sold increasing 21% to 492,410t.

During the quarter one of the company’s underground mines returned to production and is now loading and processing coal through the associated Baldwin facility and shipments over its short-line railroad have commenced.

Additionally, National Coal of Alabama kicked off extraction from two surface operations, Davis Creek and Crescent Valley, while its Poplar Springs mine has brought its dragline back into production.

“Our results have improved in line with our expectations; however, like many other companies we are susceptible to the weakened economy,” commented National Coal president Daniel Roling.

“In light of this, the demand for coal continues to be better than last year, but its effects on our income have been diminished by the rising cost of diesel fuel as well as numerous other production costs, which have gone up considerably.

“Additionally, like many other coal producers, the continued acute shortage of skilled labour, along with regulatory requirements, prevented us from executing some production enhancements on schedule.”

National Coal reiterated its statement made last quarter that production and costs continue to see an impact from an “ongoing and increased level” of regulations.

“We were, however, able to get our most profitable production facilities shored up during the quarter,” the producer said.

National Coal also noted that it had made “a number” of new agreements for sales to new customers which upped its average selling price per ton while reducing committed tons.

For the first nine months of the year National Coal has invested about $17.6 million in equipment, mine development, land and mineral rights. Its capital expenditures for equipment totalled $7.1 million, including $4.6 million purchased through equipment financing arrangements.

About $500,000 was utilised for the purchase of a 524-acre eastern Tennessee mineral lease that holds approximately 1.4Mt of recoverable coal.

National Coal also acquired another surface and mineral tract in the same region, which measures 1000 acres and includes approximately 2.3Mt of reserves, for $7 million.

“We intend to invest up to $2.6 million of additional capital expenditures during the remainder of 2008 to maintain planned production goals and approximately $450,000 to maintain existing assets,” officials said.

Looking ahead, National Coal said its management was still processing its future production goals, particularly given the continued skilled labour shortage and “significant deterioration” of the economy domestically and globally.

“Our outlook for coal demand remains healthy, but tempered for the next year,” officials said.

“However, our view on supply remains unchanged. We continue to believe that the outlook for domestic supply remains tight, with exports remaining healthy and the constraint on production, both new and existing, increasing.”

As such, National Coal revised its production goals for the remainder of the fiscal year to 1.9Mt, with 2.4Mt for 2009, and 2.4-2.7Mt for 2010.