Revenues were down just 1% to $US18.9 million from $19 million last quarter, but illustrated a wider loss, 21.6%, over the same period last year.

Tonnage sold was slightly up, 1.1%, to 372,341 tons versus 368,332t during the first quarter. However, the result was an 18.3% period-for-period drop.

NCC's sales cost fell 14.8% during the quarter, but the company noted it was an increase of just over $2 on a per-ton basis over the same quarter in 2006.

The financial bruise was also felt with the company's net and operating losses for the quarter. Operating loss for the second quarter was $4.7 million, over $3.5 million in 2006, and the net loss was $6.5 million as compared period for period to the $4.9 million loss last year.

"Recent market conditions have not been conducive to selling coal at a profit. Therefore we have chosen to reduce production and sales in order to conserve our coal reserves," said NCC president Daniel Roling.

"Unfortunately, this has negatively impacted our year-to-date 2007 financial results."

He said that signs of a strengthening market are on the horizon for the company and the industry, including increased electricity generation and a bolstered international demand.

Part of NCC's growth, Roling noted, will be a new highwall mine on its operational portfolio.

"National Coal will be opening a new highwall mine in Kentucky during the third quarter which is expected to produce approximately 20,000 tons per month," he said.

"The company has recently obtained two permits from the State of Kentucky which will make it possible to keep the miner employed for at least the next three years."

The production from the operation will cover the lease and insurance cost associated with it, totalling $545,000, he added, and said the new complex is "expected to provide a positive contribution for the remainder of the year".

National Coal employs about 240 people and produces coal in Tennessee and Kentucky for utilities in the southeastern US.