PHC NEWSPhoenix Coal Inc. advised of permit delays, declares force majeure to customers
10/6/2008 7:30 AM - Canada NewsWire
LOUISVILLE, KY, Oct. 6, 2008 (Canada NewsWire via COMTEX News Network) --
Phoenix Coal Inc. (TSX: PHC), a leading producer and consolidator of thermal coal reserves in the Illinois Basin, announced today that certain subsidiaries have provided notice of force majeure to all of their customers due to permitting delays. The U.S. Army Corps of Engineers ("COE") advised the Company on September 26, 2008, that certain environmental groups filed a protest with the COE with respect to one of the Company's three pending permit applications under Section 404 of the Clean Water Act. It is anticipated that there will be similar protests to Phoenix's two other pending permits. As a result, the Company will be unable to bring into production the coal reserves associated with these permits to satisfy a portion of the Company's contractual obligations until this situation is resolved and the necessary permits are received. The protest does not impact any of the permits that Phoenix currently has, including the recently issued permit for the Pratt mine underground development project. Phoenix is currently evaluating the extent of the ongoing force majeure events and the impact to the total tonnage to be delivered.
"It is our intention to aggressively address the issues raised in the protest letter and work diligently to expedite permit issuance. Phoenix has employed a considerable level of resources and planning, working with reputable engineering firms to assemble permit packages," said David Wiley, President and CEO of Phoenix Coal Inc. "In the meantime, Phoenix will deliver the coal that is available from our existing permits on a pro rata basis to all customers per our existing contracts and work with our customers to reach an optimal outcome for all parties given the circumstances."
About Phoenix Coal Inc.
Phoenix Coal Inc. is an integrated mining operation producing approximately 2.5 million tons of high sulphur, low chlorine, bituminous coal annually from the Illinois Basin. To address the increasing demand for energy in the Eastern US as well as in the export market, Phoenix Coal is pursuing production growth through the focused acquisition, consolidation, and extraction of coal assets. The Company's executive offices are located in Louisville, KY and its operational headquarters are stationed in Madisonville, KY.
FORWARD-LOOKING STATEMENTS
Certain information set forth in this press release contains "forward-looking statements", and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of Phoenix's future plans and operations and are based on Phoenix's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Phoenix's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: liabilities inherent in coal mine development and production; geological, mining and processing technical problems; Phoenix's inability to obtain required mine licenses, mine permits and regulatory approvals required in connection with mining and coal processing operations; dependence on third party coal transportation systems; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and exchange rates; changes in the regulations in respect to the use of coal; the effects of competition and pricing pressures in the coal market; the oversupply of, or lack of demand for, coal; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of coal products, including labor stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Phoenix undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
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SOURCE: Phoenix Coal Inc.
Joanna Longo, The Equicom Group, Investor Relations, (416) 815-0700 ext. 233, jlongo@equicomgroup.com
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