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Arch Coal planning $100M upgrade at met coal mine

Keywords: Tags  coal, Arch Coal, steel, Leer Mine, metallurgical coal, stacy irish

NEW YORK — The refurbishment of Arch Coal Inc.’s longwall system at its Leer underground mine in West Virginia will start by the end of this year, the company said.

The mine will supply metallurgical and pulverized coal injection (PCI) coal to the steel industry.

"Arch has a strong position in U.S. met markets that will be enhanced further with the start-up of the Leer longwall mine later this year," Arch Coal communications director Kim Link told AMM sister publication Steel First. "We have a significant, high-quality met reserve position and would anticipate our met output increasing over the course of the next several years, given our expectations for continued growth in global steel and metallurgical coal demand."

St. Louis, Mo.-based Arch Coal expects capital spending in 2013 to be at or below $350 million, including $100 million for the completion of the Leer Mine in Appalachia and $80 million for reserve additions.

The company is targeting metallurgical coal sales of 8 million to 9 million tons this year, and expects to see a pickup in sales supported by improving coal supply and demand trends.

Meanwhile, Arch Coal said it plans to sell its thermal coal assets in Utah to Louisville, Ky.-based Bowie Resources LLC for $435 million in a move to focus on metallurgical coal. The transaction is expected to close in the third quarter.

"The divestiture of (the Utah operations) will streamline Arch’s mine portfolio and allow us to focus on the most value-enhancing parts of our business, such as building out and upgrading our Appalachian metallurgical coal platform and optimizing our low-cost thermal coal franchise to serve the domestic and export coal markets," Arch Coal president and chief executive officer John Eaves said in a statement.

Daisy Tseng, Singapore, contributed to this story.

A version of this article was first published by AMM sister publication Steel First.

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