Question-and-Answer Session
Operator
(Operator instructions) And your first question comes from the line of David MacGregor from Longbow Research. Your line is now open.
Luke Folta – Longbow Research
Good morning, guys. This is actually Luke Folta sitting in for David. How are you doing?
Laurie Brlas
Good morning.
Joe Carrabba
Hi Luke.
Luke Folta – Longbow Research
My first question is related to your deferred development plan over at PinnOak. Can you give us what the production capacity is there excluding the curtailment and also what the implications are for 2009 and 2010 CapEx?
Joe Carrabba
Well, we certainly pulled back on the development. Luke, it's once again a tail of two cities. A year ago, nobody could get an equipment to do the development including ourselves and/or manpower to man the new equipment that we couldn't get. Obviously there is plenty of that now. So, we pulled back on the development drifts to go through with that.
The timing to give you specific numbers would be impossible Luke because if things were to turn tomorrow, we haven't really damaged our development plan at this point, if you will, because we are not producing. But as we go through the year and continue to produce, we would have a less of an ability to move that 2 million tons forward in a very quick and rapid pace.
Again, the same logic will apply if you flip it over into the next year. It will really depend on the sales rate going forward from an annual basis and as we get later in the year, we will be able to answer the questions more firmly.
Luke Folta – Longbow Research
Okay. And just second question regarding the equity loss over Amapa. If you annualize the number, it comes out to about $36 million for the year, which it seems like quite a bit ahead of your prior guidance of $50 to $60 loss. Was it one quarter, the first quarter better than you had expected and what do you think the implications are for the remainder of the year?
Joe Carrabba
Well, as we discussed in the past, the biggest difficult that we've all suffered with Amapa is just a year's delay in the ramp up. If you remember it was a year ago January when the deal was announced between Anglo and MMX. However that deal didn't close until August. So for eight months during the most critical part of this project, which was the project was being completed and in ramp up, there really wasn't the new management in place.
- To read the full transcript on Seeking Alpha, click here »
