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ACI » Topics » Our inability to acquire additional coal reserves or our inability to develop coal reserves in an economically feasible manner may adversely affect our business.This excerpt taken from the ACI 10-K filed Mar 1, 2010. Our
inability to acquire additional coal reserves or our inability
to develop coal reserves in an economically feasible manner may
adversely affect our business.
Our profitability depends substantially on our ability to mine
and process, in a cost-effective manner, coal reserves that
possess the quality characteristics desired by our customers. As
we mine, our coal reserves decline. As a result, our future
success depends upon our ability to acquire additional coal that
is economically recoverable. If we fail to acquire or develop
additional coal reserves, our existing reserves will eventually
be depleted. We may not be able to obtain replacement reserves
when we require them. If available, replacement reserves may not
be available at favorable prices, or we may not be capable of
mining those reserves at costs that are comparable with our
existing coal reserves. Our ability to obtain coal reserves in
the future could also be limited by the availability of cash we
generate from our operations or available financing,
restrictions under our existing or future financing
arrangements, and competition from other coal producers, the
lack of suitable acquisition or
lease-by-application,
or LBA, opportunities or the inability to acquire coal
properties or LBAs on commercially reasonable terms. If we are
unable to acquire replacement reserves, our future production
may decrease significantly and our operating results may be
negatively affected. In addition, we may not be able to mine
future reserves as profitably as we do at our current operations.
This excerpt taken from the ACI 10-K filed Mar 1, 2007. Our inability to acquire
additional coal reserves or our inability to develop coal
reserves in an economically feasible manner may adversely affect
our business. |
As we mine, we deplete our coal reserves. As a result, our
ability to produce coal in the future depends, in part, on our
ability to acquire additional coal reserves. We may not be able
to obtain replacement reserves when we require them. If
available, replacement reserves may not be available at
favorable prices, or we may not be capable of mining those
reserves at costs that are comparable with our existing coal
reserves. Our ability to obtain coal reserves in the future
could also be limited by restrictions under our existing or
future debt agreements and competition from other coal
producers. If we are unable to acquire coal reserves to replace
the coal reserves we mine, our future production may decrease
significantly and our operating results may be negatively
affected.
In addition to the availability of additional coal reserves, our
future performance depends on the accuracy with which we
estimate the quantity and quality of the coal included within
those reserves. We base our estimates of reserve information on
engineering, economic and geological data assembled, analyzed
and reviewed by internal and third-party engineers and
consultants. Certain assumptions and other factors beyond our
control, including those listed below, could affect the accuracy
of our estimates:
| • | unexpected geological and mining conditions which may not be fully identified by available exploration data or drill hole density and may differ from our experience in areas we currently mine; | |
| • | future coal prices, operating costs, capital expenditures, severance and excise taxes, royalties and development and reclamation costs; | |
| • | future mining technology improvements; and | |
| • | the assumed effects of federal and state environmental, safety or other regulations. |
We control substantial undeveloped reserves and have not
identified the equipment or workforce that will be employed to
mine these reserves. Permits have been obtained for some of
these undeveloped reserves. We expect to obtain the required
remaining permits by the time we commence mining these reserves,
but we may be unable to do so at all or within the necessary
time period. Some of the required
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permits have become increasingly more difficult and expensive to
obtain and the application review processes are taking longer to
complete and have been subject to more frequent challenges.
Because of these uncertainties, the quantity and quality of the
coal we are ultimately able to recover within our coal reserves
may differ materially from our estimates. Inaccuracies in our
estimates could result in revenue that is lower than we expect
or operating costs that are higher than we expect.
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