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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (31010)	1/11/2009 6:56:30 PM
From: LoneClone	Read Replies (1) \| Respond to of 193793

Production cut of US coal likely to continue steelguru.com Dow Jones reported that US coal producers will likely continue to cut production in 2009 in an attempt to support prices that have fallen sharply as demand from power producers and steelmakers has slumped. It may be mentioned that cutbacks have already begun. Peabody Energy Corporation said earlier this week that it will reduce output at mines in Wyoming's Powder River Basin. Other large producers have trimmed some output in recent months, and analysts say more cuts are likely to follow. In addition, the drop in coal prices could drive some smaller companies out of business, further reining in output. The NYMEX benchmark futures contract for Central Appalachian coal has dropped more than 50% since summer record highs topping USD 140 per tonne. Mr Raymond James, analyst at Jim Rollyson said that it could fall by as much as 15% from their estimated level of 393 million tonnes in 2008. In addition to softening power demand and falling steel production, exports of US coal overseas are forecasted to decline as the economies of China, India and Europe slow. Stock prices have responded negatively, with several coal companies losing more than half of their value since last summer's highs. The shares remain some of the most volatile in the energy sector. Even before Peabody's announcement, producers were moving to match mine production to cooling demand. Arch Coal Inc had idle some production equipment in the Powder River Basin in the fourth quarter of 2008. Consol Energy Inc has said it plans to idle a Pennsylvania mine in March 2009. A spokesman for Foundation Coal Holdings Inc said that it doesn't expect production changes since most of its coal for the coming year is under contract. Others companies declined to discuss plans for the year.