The fourth largest producer of coal in the United States, Massey Energy Co, revealed its intentions to up price estimates for the next three years.
The company expects to sell coal for $61 to $63 a ton this year, thus increasing the price by $8 from its prior forecast. The sales in 2009 are expected to be $65 to $74 a ton and in 2010 - up to 24%.
The company has also approved an additional $90 million in capital spending for 2008. This spending will spur the expansion projects and put the year's total at about $550 million.
Flooding in Australian coal mines and power outages in South African ones led coal producers in those countries to halt or slow production, particular exports to asia, leading to spikes in prices.
MEE's stock price fell 20% after Wall Street analysts expressed doubts about Massey's ability to overcome its increasing costs and continue to find lucrative new contracts. Analysts also cited concerns about pending lawsuits against Massey for violations of the Clean Water Act, and for damages that were awarded against Massey on August 3 in a case involving contract violations.
