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While oil prices are exploding and getting all the headlines,the other black gold is moving up rather nicely too. Coal is something we apparently have an abundance of in America and as new technology makes coal a cleaner burning energy source,it will make us less dependent on foreign oil in the future.
Arch Coal is a major supplier of coal in the U.S. and their latest quarter shows how much coal costs have escalated recently. Arch Coal mines steam and metallurgical coal from surface and shaft mines for power,steel and manufacturing uses. Arch Coal has estimated reserves of 2.9 billion tons. Arch owns or leases about 500,000 acres of coal land and are currently operating 18 mines. Arch mined 34.3 million tons of coal in the 1st quarter 2008,so you can see this is a huge operation and share holders are being rewarded.
Arch Coals ist quarter 2008 revenue were $699.4 million which was a 22% increase over 1st quarter 2007.Arch Coal had net earnings of $81 million or .56cents per diluted share for 1st quarter 2008 compared to $28.7 million or .21 cents for 1st quarter 2007. Arch has issued forward guidance for the rest of 2008 and are expecting to net between $2.40 to $2.80 per diluted share.
Arch coal is looking for better results for 2009. One region of operation for Arch coal is the Powder River Region and Arch has already signed sale commitments for several hundred tons for 2008 and 2009 at an increase price increase of 50% over the 1st quarter 2008 prices! Arch also has contracts to supply coal to several new coal-fired plants over the next 5 years and are expecting these contracts to amount to about 79 million tons per year. Coal prices are growing at a fantastic rates and Arch seems to be in position to reap the rewards.
coal is know as the dirty power source but great strides are being made in getting coal to burn more cleanly and also to be used as power for more uses. The technology is being developed to convert coal into diesel fuel. Coal can play a huge part in breaking our oil dependence and Arch Coal will grow as the more uses for coal are developed.
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