Arch Coal

Arhc Coal supplies 12% of low-sulfuer coal needs from three U.S. R.region: Powder River Basin, Central Appalachai and Western Bituminous. 80% of Arch Coal's 3.1 Billion tons of coal is compliance quality. Arch coal operates some of the most technology advanced mines in the world. Coal will fuel most electricity demand over the next 20 years increasing its market share from 50% to 57%. The vast majority of of Arch's production reset to market prices over the next 3 years.

Why Buy

Arch Coal produces low sulfur fuel that means the sulfer discount is low and as a result margins are better than competitors. Many electric companies can use either natural gas or coal to fuel the boilers that turn the turbines that make electricity. So watch the price of natural gas. As it rises, the demand of coal increases.

Analysts expect earnings to grow dramatically.

• Sept. 19 2006. AP reports, that while spot coal prices have declined from $57 to $50, sales at these price account for only 6 percent to 8 percent of the industry's sales. The remainder of annual sales, or about 80 percent, are on contracts that are negotiated on mostly an annual basis. A look at delivery prices, which combines spot prices and contract prices, reveals that the price paid for a ton of coal is on the rise.

In the first four months of 2004, the average delivery price stood at $26.72, according to government figures. Over the same period in 2005 it rose to $30.25 and in the first five months of 2006 it reached $34.35. The price increases figure in factors like rising production costs, new safety requirements and fuel surcharges levied by the railroads that transport the coal.

--August 16, 2006 from yahoo--. Demand for coal is beginning to outstrip supply, according to a recent research note from David M. Khani, an analyst at Friedman, !!Billings, Ramsey & Co. Natural gas supplies are also being whittled down, which should drive coal demand higher this fall, he said.

On the same day, a news release announced that Arch Coal will supply low-sulphur coal, from it Carbon Basin Coal Reserve, to Medicine Bow for its planned $ billion projects to develop, design and build coal-to-liquid plant that will produce 11,000 barrels a day of diesel for trucks and other fuels.

Notes

Coal to Liquid grows in popularity

August 24, 2006. Arch Coal Inc. said Thursday it agreed to invest $25 million in DKRW Advanced Fuels LLC as part of a deal in which it acquired a 25 percent equity interest in the company.

Arch said in a release that in exchange for the equity interest, it also agreed to extend its existing option agreement with DKRW Advanced Fuels, and to work with the firm to secure coal reserves for two additional coal-to-liquids projects outside of the Carbon Basin in Wyoming.

Links

coal report

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