Arch Coal Inc. Q3 2008 Earnings Call Transcript

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2008-10-27 12:48:14.0

Tags: Coal, Call Transcript, Ton, Earnings, Friedman Billings Ramsey, Arch Coal Inc., PCI, Pricing, Storage, Hardware, Marketing, Seeking Alpha, Coal, Call Transcript, Ton, Earnings, Friedman Billings Ramsey, Arch Coal Inc., PCI, Pricing, Storage, Hardware, Marketing, Seeking Alpha

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). We'll go first to David Khani, Friedman Billings Ramsey.

David Khani - Friedman Billings Ramsey

Yeah, hi, guys. Could you talk a little bit about how much met coal you have available for pricing of that 6 million tons that you think you're going to be able to produce for 2009?

John Eaves

Dave, certainly, our guidance for 2009 is net 5 million to 6 million ton range. We're having a number of discussions with some of our customers. I don't want to give you the exact number for competitive reasons, but I think I indicated in the release that we have already sold some PCI volumes for 2009 in that 175 million to 195 million range. We've also sold some limited amounts of met coal with the plus $200 range, but we're currently having discussions with domestic customers, international customers.

I don't think it's any great secret that a lot of the customers are pretty hesitant right now with what's going on in the credit markets. So we really haven't settled a lot of our volumes.

So, I really wouldn't want to give you an exact amount, but we expect those conversations to continue between now and the end of the year and probably into first quarter before we settle out all those volumes, so I'd be a little hesitant to give you an exact number at this point.

David Khani - Friedman Billings Ramsey

And then maybe as a follow-up question, just how much tonnage do you think, you're going to export out of the US this year in total?

Steve Leer

In 2008, we're going to export between 9 million tons and 10 million tons. Now, that includes some PRB tons that are shipped to Canada as well as some Western Bit tons that are shipped to Mexico and to Europe, in addition to our met and steam coal out of the East, so it will be somewhere between 9 million tons and 10 million tons for 2008.

David Khani - Friedman Billings Ramsey

Great. Thank you.

Operator

Our next question is from Jim Rollyson, Raymond James.

Jim Rollyson - Raymond James

Good morning, guys.

Steve Leer

Good morning, Jim.

John Eaves

Good morning, Jim

Jim Rollyson - Raymond James

I guess, first off, nice to see you sticking to your public strategy of not just producing coal for the fun of it. With that in mind, can you may be talk about the dragline and shovel cut, what you see that doing to your volumes and costs over the next few quarters?

 

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