President's Message
The first three quarters of 2008 have comprised one of the most exciting and dynamic periods in the history of the coal industry. It has also been perhaps the most successful period of time for Massey to date.
Strong results continued in the third quarter as new mines developed within our extensive expansion program made significant contributions to our production. Total tons produced in the third quarter increased by 8% year over year and we can expect production to increase further as these mines continue to ramp up and as new mines are added.
Throughout the first nine months of the year we were able to leverage our high quality reserves and increased production to take advantage of the high demand for exports of both steam and metallurgical coal. Our tons exported increased by nearly 80 percent and our tons of metallurgical coal sold were up 20 percent.
The end of the third quarter marked the one year anniversary since we announced our strategic expansion plans. In that time we have opened 15 new mines and added 7 new underground miner sections at existing mines.
We have added the Inman resource group with a new processing plant that is expected to begin operating in December.
We have added over 12 miles of new belt structure and a new loadout at our Mammoth resource group. We have disassembled, relocated and redeployed a large electric shovel at our Republic resource group to improve productivity and the work continues. Construction has begun on a new processing plant at Coalgood Energy in Harlan, KY and significant expansion projects are planned or underway at 11 of our 23 resource groups.
Our expansion and quality reserve base have positioned our company to take advantage of a strong global coal market. However, if the current economic conditions continue and cause the coal markets to weaken, our cost advantages, market diversity and strong balance sheet position us to be able to thrive in a weaker market wherein we would expect to take advantage of potential acquisition opportunities.
In summary, our expansion work is on track and is yielding positive results, our operating results for the first 9 months of the year have been on a record pace and, in spite of economic uncertainty that has negatively impacted coal prices, we are well positioned to continue our plans for growth and to generate enhanced shareholder returns in the quarters to follow.
Thank you for your continuing support.