Drops in coal demand and natural gas pricing this year will not stop Alliance Resource Partners LP of Tulsa from generating record revenues for a ninth straight year, the coal producer's executives said Wednesday.

Alliance Resource Partners' third-quarter net income totaled $36.4 million, a 25 percent increase over that of the same three months in 2008.

Overall revenues so far this year have topped $932 million, and by year's end, they should be in the range of $1.2 billion to $1.3 billion.

"Results like these would be impressive under any circumstance; in the context of the current challenges facing our industry and our partnerships, the results that we have delivered thus far in 2009 are truly impressive," Alliance CEO Joseph Craft said in a morning conference call with analysts and reporters.

The demand for coal for electricity generation has dropped about 7 percent across the country this year, he added.

Low prices also have favored a switch to natural gas-fired generation plants, forcing Alliance to shut some mine operations this summer and lay off about 75 workers at its Pontiki unit in Martin County, Ky.

"The benefits of our cost-management efforts are evident," Alliance Chief Financial Officer Brian Cantrell said. He expects 2009's overall production to total between 25.9 million and 26.4 million tons, all of it contractually committed and priced.

A new seven-year supply deal with the Tennessee Valley Authority also will increase production by at least 2 million tons beginning next year, reports say.

Alliance has secured sales commitments for approximately 27.6 million tons next year. Craft noted that about 450,000 tons are committed to the higher price metallurgical coal market in 2010.

Forecasters believe that nationwide coal demand will climb 2 percent overall in 2010.

On the safety front, teams from the company's Warrior and Gibson units captured champion honors at the National Mine Rescue Competition last summer in Nashville, Tenn., Craft noted.

Alliance Holdings LP, which owns the coal producer's general partner and incentive distribution rights, gained $23.7 million in third-quarter profits.

Its CEO, Joseph W. Craft III, credited Alliance Resource Partners' new sales agreement with the TVA and new coal production at its River View mine in Kentucky.

Alliance Holdings also declared a quarterly cash distribution of 44 cents per share, 12 percent higher than the 39 cent dividend for the same period last year. The dividend will be paid Nov. 19 to shareholders of record on Nov. 12.

Alliance Resource Partners, which started in 1971 as Mapco Coal Inc., is one of the country's largest producers of steam coal, with operations in Illinois, Indiana, Kentucky, Maryland and West Virginia.

It employs more than 2,000 people, including 80 in Tulsa.

Shares of Alliance Resource Partners fell $1.36 to $36.52 on Wednesday on the Nasdaq exchange.

Alliance Holding closed down 17 cents, at $21.41 per share.

Rod Walton 581-8457

rod.walton@tulsaworld.com

Originally published by ROD WALTON World Staff Writer.

(c) 2009 Tulsa World. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.