Mining Weekly reported that US coal producer Massey Energy has again reduced its production estimate for this year, as it curtails operations to match weakened demand.

The company now expects to produce between 38 million tonnes and 41 million tonnes of coal compared with a previous forecast of 44 million tonnes to 46 million tonnes. Going into this year, Massey had planned to produce as much as 48 million tonnes.

Global coal demand has been heavily affected by slowing economic activity and several producers have indicated that they are in negotiations with customers over deferred coal shipments.

The firm said that Massey expects to ship between 44 million tonnes and 46 million tonnes of coal this year, at an average price of between USD 65 per tonnes and USD 67 per tonnes.

Estimated production in 2010 has been lowered to between 35 million tonnes and 40 million tonnes from an earlier forecast of as much as 50 million tonnes.

Massey reported net income of USD 43,4 million for the March quarter, compared with USD 41,9 million a year earlier after it increased production and coal prices rose year on year.

Mr Don Blankenship CEO of Massey said that “On the other hand, pricing and market demand were weaker than we expected in the quarter as a result of the continuing weakness in the general economy."

Mr Blankenship said that the outlook for both pricing and demand remain uncertain because of the global economic crisis. However, the company continues to look for acquisition opportunities.

He added that "In this market we anticipate opportunities to possibly to expand our exposure in other regions or in non-core businesses to further increase sustainable shareholder value."

(Sourced from Miningweekly.com)