Question-and-Answer Session
Operator
Brett Levy, your conference line has been unmuted. Go ahead and ask a question.
Brett Levy – Jeffries and Company
Hi, guys. As you look at, you know, a rough estimate of your costs going into 2009 per ton, I know you guys have said it would be down, can you give us a ballpark number relative or a ballpark direction relative to 2008?
Daniel Roling
In 2008, our average cost as we put in the report was $61.90. I – we are not forecasting where we expect it to be but we do – our objective is to have our cash cost below that number, below 60 would be something we're shooting for, but at this point, we are not prepared to forecast a number, Brett.
Brett Levy – Jeffries and Company
And then, you know, where we're seeing Big Sandy barge [ph] right now, obviously we would see that there is going to be quite a bit of capacity that needs to be idled. Do you have, as you look towards 2010, a list of mines that you might consider idling or something along those lines going into 2010, or is your thought at this point that prices will rally going into that year and you won't need to?
Daniel Roling
We believe that 2010 we should – we may see prices flat, so it is an improvement. But the key point I would make, Brett, is that we don't sell into the Big Sandy. We do realize that there is a lot more supply in the Big Sandy area and demand at present, but we are significantly further south from that, and we're closer to our customers. Big Sandy pricing is probably not a good barometer for our coal and I would say that I don't believe at this time our market is as weak as the Big Sandy market. Bill or Mike, would you have anything to add to that?
Mike Castle
No.
Brett Levy – Jeffries and Company
All right. And then lastly, I know that you guys have been talking about doing some exploration of your met operations or met potential operations in Alabama, is that something you're going to continue to develop or you're going to wait for prices to improve?
Daniel Roling
I would say at this point with the met coal prices having come down a lot and the demand off significantly, met coal projects are not receiving any higher priority than any of our projects right now. And I would say that the met mine in Alabama that we did open in the fourth quarter, Davis Creek, we did sell some metallurgical coal out of it, but I would say that most of that coal going forward at this time will most likely be either scaled back on the production, or if not metallurgical, it may be put into the steam coal market.
- To read the full transcript on Seeking Alpha, click here »
