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Massey considers production increase




CHARLESTON, W.Va.

Massey Energy Co. says it’s considering additional production increases to meet strong demand for U.S. coal overseas.

Massey already announced plans in October to add 8 million tons of production by 2010. Now the company is considering ways to up coal output even more and to do so by 2009, Chief Executive Don Blankenship said during a conference call Feb. 1 with Wall Street analysts. Blankenship said his focus has been on producing more metallurgical grade coal, which is used to make coke for steel manufacturers.

“I’ve been looking briefly at 1.5 million to 2 million tons of more met production that could be brought online during ’09,” he said. “We believe that is probably going to be wise beyond what we’ve done, but, again, there’s a lot involved that has not yet been studied from an engineering viewpoint.”

Blankenship said strong demand

for imports to China, India and Eastern Europe will combine

with high ocean freight rates and the weak dollar to support strong prices for central Appalachian coal even if the U.S. economy goes into a recession.

“The bottom line is that while we may go through a recession that slows economic growth in the U.S., we don’t expect the demand for coal to suffer in 2008.”

Massey also told analysts it has signed three-year employment contracts with an unspecified number of rank-and-file miners. Blankenship said the company hopes to avoid turnover rates that topped 20 percent for underground miners and hurt production in 2006.

“The big improvement we’re trying to make and the focus of our incentives was underground,” Blankenship said.

Massey is the nation’s fourthlargest coal producer by revenue, and operates 19 mining complexes in West Virginia, Kentucky and Virginia.


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