Massey Energy making expansion plans
November 01, 2008 @ 12:00 AM
2008/The Herald-Dispatch
The Associated Press
herald-dispatch.com
CHARLESTON -- Despite the slowing economy, coal producer Massey Energy Co. remains committed to an ambitious expansion plan that added 15 new mines over the past year, company officials said Friday.
The Richmond, Va.-based company also expanded seven existing mines, hired almost 900 miners and bought a fleet of surface mining equipment over the past 12 months as part of a plan to increase coal output to 50 million tons by 2010, from approximately 40 million last year.
The weakening economy has prompted Massey to back off a bit on shipment and price projections, but Chief Executive Don Blankenship told analysts he remains bullish on expansion during a conference call to discuss third-quarter earnings.
Investing in new production is a better use of capital than buying competitors or simply keeping money in the bank, Blankenship said. Massey spent $230.3 million in cash on capital spending during the third quarter, up from $60.1 million a year earlier. For the full year, the company plans to spend between $650 million and $700 million on capital projects.
Massey also may use some of the $877.7 million in cash and short-term investments it had at the end of the third quarter to repurchase stock. Its shares have fallen approximately 76 percent since peaking at $95.70 last summer. Repurchasing stock will discussed by the board of directors in November, Blankenship said.
Massey operates mining complexes in West Virginia, Virginia and Kentucky. Its stock rose rose $2.68, or 13 percent, to $23.09 Friday. |
