Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Meredith Bandy with BMO Capital Markets.
Meredith Bandy - BMO Capital Markets
You say that 2012 could be up to 9.5 million tons and my understanding from last quarters call was that 9 million tons was sort of your top capacity and really a more practical capacity would be a tiny bit below 9, so what has changed and how do we get from that 9ish to 9.5, the capital required, that type of thing?
George Richmond
No there is no capital required. Secondly is that most of it comes from the expansion at No. 7. As we have developed into the panel, we are not mining that area, we always knew from coalholes that the quality of the coal got thicker and better as we moved away from the fault where we have to mine the first panel. The major differences are inches of coal or the thickness of coal in higher yields and some better development rates on the sections allowing the longwalls to produce more. So, it is not an expansion, it is really more information on the materials we are going to mine.
Meredith Bandy - BMO Capital Markets
Okay, thank you very much.
Operator
Your next question comes from Garrett Nelson with Davenport & Company.
Garrett Nelson - Davenport & Company
As you noted the variance between your met coal production and shipments in Q3 implied a draw down in mine inventories of about 335,000 tons and your corresponding Q4 guidance implies an additional draw in inventories. Could you give us a break down of your met coal inventories by mine at the end of the third quarter?
George Richmond
No.4 180,000, No. 7 280,000 and by the way as of October 16 it was around 310,000, 320,000.
Garrett Nelson - Davenport & Company
Okay is that total?
George Richmond
Yes.
Garrett Nelson - Davenport & Company
Okay, secondly another US based producer that reported yesterday provided guidance that also implies sequentially lower met coal shipments in Q4. Should we read anything into your Q4 guidance, or was it simply a resurgence in demand from steel producers that really began in late spring/early summer perhaps restocking?
George Richmond
There is no reduction in demand; we just don’t have enough coal in inventory. There are a lot of requests to bring shipments forward, or additional volumes, and we are not going to turn them down.
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