NMA Coal Forecast continued

Eastern coal mines are expected to produce 486 million tons, driven largely by increased offshore demand for metallurgical coal used in steelmaking and by increased domestic demand for electricity generation. Western coal production is expected to reach the 640 million ton level this year, topping the previous record of 625 million tons in 2004.

In 2004, coal generated 51.8 percent of U.S. electricity available on the national grid and is likely to generate 52.4 percent this year. Persistent high natural gas prices and capacity limitations at nuclear plants will favor greater coal utilization to fuel the expected 2.2 percent increase in electricity demand in 2005. Electricity accounts for over 90 percent of all domestically-produced coal, said NMA. Consequently, U.S. coal demand in 2005 is expected to total 1.183 billion tons and exceed production for the third consecutive year.

Strong offshore demand and a relatively weak dollar will boost U.S. coal exports for the second year in a row, said NMA.