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Alpha CEO lauds safety performance, results in 4Q

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Alpha Natural Resources reported a strong fourth quarter in terms of safety, although the company did post a net loss of $128 million.

Alpha said the net loss was much lower than the same quarter in 2011 when it posted a $793 million loss. Alpha said it may continue to adjust its operational footprint and marketing strategy to adapt to "evolving industry decisions."

"This was a pivotal quarter for Alpha and concluded a year in which we made tremendous strides across our strategic priorities.  Alpha posted strong results in the fourth quarter, reporting adjusted EBITDA of $217 million primarily driven by our ability to control costs in both our Eastern and our Western operations," said Kevin Crutchfield, Alpha's chief executive officer.  "We have also been executing well against our internal objectives, and the extensive restructuring initiative we announced in September is largely behind us.  And while we do not expect the unit costs reported in the fourth quarter to be sustainable, we do expect to at least hold the line or slightly reduce our unit costs in the East this year compared with full year 2012, and we are guiding to a substantial reduction in SG&A expense for full year 2013."

On a positive note, the company did record improved safety incidences reported, though three miners died at Alpha operations in 2012.

"Once again Alpha improved its safety performance on several fronts," Crutchfield said.  "Compared with the prior quarter, both our incident rate and our days-lost declined by 20 percent in the fourth quarter. Looking at the full year 2012, Alpha achieved a 20 percent improvement in its incident rate and a 32 percent reduction in serious and substantial MSHA citations. No matter what market headwinds or other challenges we face, we can never lose our focus on 'Running Right.'  The year 2012 was no exception.  I would like to congratulate our entire workforce on their successful efforts.  While I am pleased with the efforts all of our employees are making on accident reduction, the loss of three of our fellow employees in 2012 is a somber reminder that there remains much work to be done, and we must remain vigilant at all times."

Market changes, Alpha reported, are forcing the company to take another look at both Appalachian and Powder River Basin coal operations.

"In Central Appalachia, Alpha has idled or closed a number of higher production cost steam coal operations in order to control costs and match supply with structurally diminished demand that has decreased markedly over the course of the last year," the report states. " At the same time, Alpha more than doubled its Eastern thermal coal exports in 2012 to nearly six million tons, and the Company plans to continue to build its export thermal franchise in 2013, and beyond."