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Arch says demand may rise for Wyoming coal


The head of one of Arch Coal says international demand may increase coal exports from northeastern Wyoming.

Steve Leer, chairman and chief executive officer of St. Louis-based Arch Coal Inc., told analysts in a conference call late last week that the company is in serious discussions to move coal from Wyoming’s Powder River Basin to the Gulf Coast and West Coast.

“Global coal demand is growing at a staggering rate, up 30 percent in just the last five years,” Leer said. “These global supply constraints along with the weak U.S. dollar has aided in moving U.S. coal to these places.”

Leer said Wyoming coal may move through New Orleans and Vancouver, Canada. But he said capacity at the ports has been a concern.

Leer’s Feb. 2 comments followed remarks the day before by Peabody Energy officials, who also said they expect coal from the Powder River Basin to fuel the growing export market.

Leer said he was not sure how economic conditions would influence domestic coal markets.

“No one seems to know if we are headed for or are already in a recession, but it is safe to expect slower economic growth in the first half (of 2008),” Leer said.

Arch Coal saw its fourth quarter fortunes increases slightly in 2007. Profits in the fourth quarter last year were $81.6 million, up from $79.5 million in the same quarter of 2006.

Arch is predicting higher profits this year, fueled by increasing international demand.

“The momentum is building as we enter 2008,” Leer said of profit projections.

Leer said eastern utilities may also burn more Wyoming coal.

“We see new demand in the eastern market as being the story and we are being contacted by new customers,” Leer said. “You certainly see additional coal moving east and that could be anywhere from 13 (million) to 15 million tons a year.”

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