Alliance Resource Partners Signs Coal Supply Agreement With TVA

Published: 26-Aug-2009

Alliance Resource Partners has entered into a new coal supply agreement with the Tennessee Valley Authority which will increase ARLP's annual coal supply to TVA by an additional two million tons per year beginning in 2010.

Under the new agreement, beginning next year, ARLP will reportedly deliver five million tons of coal per year from its Illinois Basin operations to TVA over the next seven years. Under the terms of the new agreement, the parties may extend deliveries of five million tons per year for up to an additional seven years beyond the initial term.

ARLP is contractually committed and priced for substantially all of its anticipated 2009 coal production of 25.9 to 26.4m tons.

With the new TVA agreement, ARLP has now secured sales commitments for about 27.6m tons, 27.3m tons and 20.4m tons in 2010, 2011 and 2012, respectively. About 1.0 million tons of the 2012 coal sales commitments remain open to market pricing.

Joseph W. Craft III, president and chief executive officer of Alliance Resource Partners, said: “TVA has been an important customer to ARLP for many years and this new agreement further strengthens the long standing relationship between our companies. This new agreement reflects the importance our customers place on securing a reliable supply of low-chlorine, high-sulfur coal.”

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