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Monday, January 16, 2012

Patriot Coal to reduce coking coal output on weak demand

Monday, 16 Jan 2012

Patriot Coal Corporation announced the implementation of proactive measures at its Southern WV operations to curtail higher cost production in response to weaker market demand for metallurgical coal.

The company will idle one contractor operated mine and two subsidiary operated production units in the Rocklick complex. Two contractor operated mines in the Wells complex will also be idled.

Mr Richard M Whiting president & CEO of Patriot Coal said “Metallurgical coal demand has trended steadily downward in recent weeks, most notably in the export market. These production cuts, in conjunction with other cost-reduction measures being implemented concurrently, are aimed at lowering our mining costs, aligning production with identified sales, and preserving high-quality reserves for a stronger market.”

He said “During 2011 we increased metallurgical coal production to match the needs of the market. The modular nature of our Met Build-Out program allows flexibility to dial production up or down in line with market circumstances.”

He added “These changes will trim output from our highest cost sources while the met market finds its balance. As world economies return to normal growth rates, we expect a resumption of the longer-term growth trend for metallurgical coal demand that should allow us to bring much of this production back on line.”

The company plans to provide guidance for 2012, including anticipated metallurgical coal volume, in conjunction with its fourth quarter earnings announcement.

Patriot Coal Corporation is a leading producer and marketer of coal in the eastern United States, with 14 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls approximately 1.9 billion tonnes of proven and probable coal reserves.

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