James River follows growth strategy

RICHMOND-based James River Coal Company in Virginia has listed several internal growth projects for 2006-07.

Staff Reporter

The company’s current projects include the highwall mine #1, to be completed in the 2006 third quarter at a cost of $US7 million, and the surface mine #2, an $US8.1 million project scheduled for the fourth quarter. Both operations are projected to be producing around 360,000 tonnes each by 2007.

Preparation plant upgrades are also scheduled at a cost of $US6.8 million to be completed by 2006 first quarter.

The company said its updated Central Appalachia (CAPP) guidance for 2006 and 2007 reflected the impact of internal growth projects, as well as recent experience with costs and capital expenditures.

Internal growth projects are assessed on four factors: those that come primarily from existing assets; projects that will provide a high rate of return; projects that will lower the average cash cost to mine coal; and projects that will improve the overall balance of the mine portfolio.

“We believe that the above projects selected for development in 2006 meet all of these goals," company chief Peter T Socha said.

The company had originally planned to spend up to $US43,000 in 2006 and $US48,000 in 2007. This has been revised to up to $US88,000 in 2006 and up to $US74,500 in 2007.

James River Coal Company mines, processes and sells bituminous, steam and industrial-grade coal – primarily to electric utility companies. The Company's mining operations are managed through six operating subsidiaries located in Central Appalachia and the Illinois Basin.