Mining the Past Powering the Future

Transcription

1 Mining the Past Powering the Future Eastern Operations James J. Bryja Senior VP, Eastern Operations Foundation Coal Investor Day 2007 May 30,

2 Eastern Operations Scorecard A B C D F Comments Product/Market Diversity Regional Diversity Mining Method Diversity Transportation Diversity Production Volume Safety Environmental Compliance Growth Prospects Management Performance Wide variety of coal qualities; high and low sulfur steam, domestic and export metallurgical, industrial 2 major coal supply regions NAPP & CAPP Longwall, continuous miner and surface (loader/excavator/truck) Two major railroads Three navigable waterways 2007 guidance range: MM tons 23% percent improvement in 2006 vs % better than industry average Good corporate citizen, operate proactively and monitor our performance via internal audits Foundation Mine (7 21 MM tons per year), Freeport Mine (2 3 MM tons per year), Harts Creek (2 MM tons per year) Veteran team, technical degrees, 25+ years experience 23% production growth since 1999 Margins Highest margins in company on percent and dollar basis 2

3 Presentation Outline Northern Appalachia (NAPP) Operations Review Growth Initiatives Central Appalachia (CAPP) Operations Review Growth Initiatives What Sets FCL Apart from its Peers 3

4 NAPP Location Map Two Operating Coal Mines Coal Gas Recovery Operation 114,000 Acres of Coal Reserves 748 MM Tons of Reserves Freeport Mine Freeport Emerald Emerald Mine Mine Foundation Foundation Mine Mine Cumberland Cumberland Mine Mine Sewickley Reserves 4

5 NAPP Operations Cumberland Cumberland Emerald 1 longwall (second longwall in Q4 07), 4 continuous miners High-Btu, mid-sulfur steam coal Batch-weigh loadout (NS & CSX) 1,850 ton-per-hour prep plant 86 MM tons reserves 589 employees 1 longwall, 4 continuous miners High-Btu, mid-sulfur steam coal 17-mile railroad to river dock 1,650 ton-per-hour prep plant 98 MM tons reserves 671 employees 5

6 NAPP Operations (Cont.) Coal Gas Recovery Vertical holes drilled from surface Horizontal holes drilled from underground Both vented to atmosphere 2004 capture, process and sell this methane 2006 drill long-lived directional holes from surface Processing plant has capacity 5 MM cubic feet per day 6

7 Sustainability and Growth in NAPP Pittsburgh No. 8 Seam (Foundation Mine) Freeport Seam (Freeport Mine) Sewickley Seam (Future Opportunity) 7

8 Pittsburgh No. 8 Seam Foundation Mine Long-Lived 420 million tons of reserves 30-year life at 14 million tons per year High-Quality Steam Coal 13,000 Btu/lb Lb. SO 2 per mm Btu Rail served 8

9 Foundation Mine Timeline and Cost Schedule Year: Item Exploration Property Development Engineering Mine Permit Surface Facilities Permit Refuse Area Permit Powerline Construction Slope Construction Rail Construction Surface Facilities Construction Development Mining Longwall Production Cumulative % Capital 1% 2% 3% 7% 22% 40% 44% 90% 100% 9

10 Freeport Seam Freeport Mine Long-Lived 68 million tons of reserves 27-year life at 2.5 million tons per year High-Quality Steam and Metallurgical Coal 13,000 Btu/lb. 1.5 Lb. SO 2 per mm Btu Barge served with potential rail access 10

11 Freeport Mine Timeline and Cost Schedule Year: Exploration Property Development Engineering (Underground/Surface) Permitting Process Underground Mine Slope Construction Permitting Process Surface Facilities Surface Facilities Construction Refuse Permit and Approval Mine Development First Coal Production Full Scale Production Cumulative % Capital 1% 4% 29% 71% 92% 100% 11

12 Sewickley Seam Future Opportunity Long-Lived 79 million tons of reserves 26-year life at 3 million tons per year High-Quality Steam Coal 12,400 Btu/lb Lb. SO 2 per mm Btu 12

13 WAYNE MINGO CABELL PUTNAM BOONE RALEIGH CLAY NICHOLAS GREENBRIE CAPP Operations 13 CHARLESTON OFFICE FAYETTE Kingston Resources Pax Rail Loadout Pioneer Fuel Pioneer Plant WYOMING SUMMERS MERCER PUTNAM CLAY Rivereagle Dock Rivereagle Dock Rockspring Development KANAWHA Rockspring Development LINCOLN Harts Creek Harts Creek Laurel Creek Pax Surface Mine Laurel Creek Baber Loadout Charleston Office Kingston Pax Surface Mine Pax Loadout Paynter Branch Mine Pioneer Loadout KENTUCKY

14 CAPP Operations Eagle Butte Kingston Resources Belle Ayr Rockspring Development 2 underground mines, each continuous miner-equipped High-quality metallurgical coal Truck to barge or rail (NS) 700 ton-per-hour prep plant 8 MM tons reserves 205 employees Continuous miner-equipped Low sulfur steam coal NS-served 1,800 ton-per-hour prep plant 41 MM tons reserves 336 employees 14

15 CAPP Operations (Cont.) Laurel Creek Mining Eagle Butte Belle Ayr Pioneer Fuels 4 underground mines, each continuous miner-equipped Low sulfur steam and industrial coal Truck to barge or rail (CSX) 650 ton-per-hour prep plant 4.7 MM tons reserves 207 employees 2 surface mines, 1 loader/truck & 1 excavator/loader/truck equipped Low sulfur steam coal, high-quality export metallurgical coal Rail-served (CSX-Pax, NS-Paynter Branch) 15.2 MM tons reserves 113 employees 15

16 CAPP Operations (Cont.) River Eagle Processing 500,000 ton inventory 2,000 ton-per-hour loading rate Inbound & outbound automatic sampling 14 jumbo barge moorage Computer based blending via 6 feeder reclaim system 16

17 Growth in CAPP Harts Creek Mine - Alma and No.2 Gas Seams Long-Lived 64 million tons of reserves 32-year life at 2 million tons per year High-Quality Steam Coal 13,000 Btu/lb. 1.2 to1.7 Lb. SO 2 per mm Btu 17

18 Harts Creek Mine Timeline and Cost Schedule Year: Exploration Property Development Permitting and Engineering Phase I-face-up & trucking to LC Phase II-build plant & trucking to Baber Phase III-develop #2 Gas seam-slope Full Scale Production Cumulative % Capital 1% 4% 5% 9% 43% 67% 79% 100% 18

19 What Sets FCL Apart in the East Diversity Company Culture Technology Employee Involvement Process Improvement 19

20 Diversity of Assets Mining Methods Coal Qualities Transportation Options Markets 20

21 Company Culture Vision Statement Employees are our most valuable resource. Using state-of-the-art technology we will be a low-cost, profitable operator and industry leader in safety and environmental practices. We strive continuously to improve our product quality and overall performance. Guiding Principles Costs Product Customers Community Continuous Improvement Environment Employee Development Employees Management Style Safety Communications 21

22 Technology Current Two-meter shields 1,450-foot wide longwall faces Real-time equipment monitoring Pumpable cribs Future Underground wireless communication and tracking system One-step roof bolting Fully automated plow system 22

23 Employee Involvement Continuous Improvement Initiatives Local Teams Regional Teams Corporate Teams Sourcing Initiatives Equipment Specification and Manufacture Vendor Agreements Environmental Audits 23

24 Process Improvement Feet /01 12/02 05/03 10/04 6/05 3/06 12/06 Longwall Move Dates Days Face Length Move Time Increasing longwall move times Formed improvement team of Operations and Engineering personnel Problem solved and identified improved methods 24

25 Eastern Summary Safe, Efficient and Low Cost Operations Sustainable Production 78% of production from 3 large mines High margins Consistent quality Predictable performance Internal Growth Potential Consistent Management Philosophy 25

26 Mining the Past Powering the Future 26