CONSOL Energy Idles Virginia Coal Mine, Citing Market Conditions, Water Disposal Ruling.
Market conditions are cited by CONSOL Energy for the idling of coal production at the Buchanan Mine near Mavisdale, Va., beginning March 1.
The mine, operated by CONSOL Energy's Consolidation Coal Company subsidiary, will be idled for at least one month, allowing the mine to balance coal production with expected customer shipping schedules to prevent coal inventories from increasing.
In January, CONSOL Energy said that 2009 production of metallurgical coal from the Buchanan Mine was expected to be approximately 3.1 million tons -- less than the mine's current capacity -- based on expected sales.
At this level of production, the company said it expected the mine to run the longwall mining system for two, rather than three, shifts per day, and to take short, irregularly scheduled, idle periods to match production output with customer shipping schedules, thereby minimizing a build-up of coal inventories.
During the idle period, company officials will also evaluate mine water disposal issues raised by a recent court ruling that water, which naturally accumulates in the Buchanan Mine, may not be deposited in the voids of the nearby VP 3 Mine.
If that ruling remains in effect, and if other alternatives for the disposal of water are not available, then CONSOL Energy may be forced to further idle the Buchanan Mine.
The mine's production target for the year is 3.1 million tons. The target for annual natural gas production, some of which is produced in association with mining activity, remains at 85 billion cubic feet. Natural gas production is conducted by CNX Gas Corporation, a majority-owned subsidiary of CONSOL Energy.
CONSOL Energy Inc., a high-Btu bituminous coal and natural gas company, is a member of the Standard & Poor's 500 Equity Index and has annual revenues of $4.7 billion. It has 17 bituminous coal mining complexes in six states. For more information, visit www.consolenergy.com.
CNX Gas is a natural gas exploration and production company, and is a majority-owned subsidiary of CONSOL Energy Inc. Both companies are headquartered in the Pittsburgh area.
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