Alpha Natural Resources recently outlined plans to restructure, saving the company an additional $100
million and idling 16 million tons of capacity. Between now and early 2013 the company will reduce its
workforce by 1,200 positions.

“We’re taking decisive actions that set the table for Alpha to compete successful-ly as a leader in the global coal markets for years to come,” said Kevin Crutchfield, chairman and CEO of Alpha Natural Resources. “We’re taking a long-term view of the thermal coal market, and we believe there are solid opportunities…to produce and sell thermal coal profitably into a smaller domestic market and to customers in new markets overseas.

“At the same time we have a big oppor-tunity to advance Alpha’s position as a premier supplier of metallurgical coal,” Crutchfield said. “Forecasts point to more than 100 million tons of increased seaborne metallurgical coal demand by the end of this decade...We intend to partici-pate meaningfully in the market upside with costs that are globally competitive.”

Alpha’s thermal rationalization efforts focus on operations that have a cost, cus-tomer or transportation advantage. Opera-tions that have competitive cost positions and more stable customer demand—such as supplying baseload power plants and generating units that will survive a stricter regulatory regime—will supply the majority of the company’s U.S. thermal coal output. The company plans to further develop its global marketing platform for its high-quality thermal coals.

A combination of idling mines and equipment, production curtailments and reserve depletion will take place through early 2013, reducing coal production by 16 million t/y. Approximately 40% of the reduction (6.4 million tons) will come from higher-cost thermal coal operations in the East that are unlikely to be competitive for the foreseeable future. And, approximately half of the reduction (8 million tons) will come from production curtailments in the Powder River Basin to match currently committed sales volumes. The balance (1.6 million tons) will be reduced production of lesser quality metallurgical coal.