Alliance also disclosed more details about its partnership agreement earlier this year with White Oak Resources to build a new longwall mine near McLeansboro in Hamilton County, Ill.

For the three months ended September 30, Alliance’s net income climbed 42.2% to $104.1 million while revenues totaled a record $487.7 million, up 18.8% over the year-ago period. Alliance sold a record 8.3 million tons of coal at an average price of $56.89/ton in the latest quarter versus 7.6 million tons at an average price of $51.68/ton in the third quarter of 2010

During the quarter, Alliance sold approximately 28.4 million tons of coal to be delivered over the next five years. It also completed the White Oak Resources transaction and began construction on the new Gibson South mine just west of Princeton, Ind.

Based on results through the first three quarters of 2011, Alliance continues to anticipate 2011 coal sales of 32 million to 33 million tons, substantially all of which is committed and priced. Beyond 2011, the company has secured coal sales commitments for approximately 34 million tons, 33.2 million tons and 26.3 million tons in 2012, 2013 and 2014, of which about 7.7 million tons in 2013 and 7.1 million tons in 2014 remain open to market pricing.

The company “continues to build for the future and is focused on growing long-term cash flow on a sustainable basis,” said Joseph Craft III, president and CEO, Alliance. “Near term, we expect 2012 to be another growth year for ALRP,” thanks partly to the planned startup in the first quarter of 2012 of the Tunnel Ridge longwall mine in Ohio County, W.Va., and Washington County, Pa. Tunnel Ridge is expected to draw upon a nearly 100-million-ton reserve base to produce about 6 million tons of high-sulfur coal anually at peak output.

Meanwhile, challenging geological conditions at the Pontiki underground mine near Inez in Martin County, Ky., and the impact of stringent regulatory compliance on productivity contributed to lower Central App sales volumes in the third quarter of 2011. A longwall move at the Mountain View mine in Tucker County, W.Va., resulted in lower Northern Appalachian coal sales volumes in the quarter.

Coal prices improved in all of Alliance’s operating regions in the third quarter of 2011. In particular, increased price realizations in Northern Appalachia from coal sold into the high-priced export markets drove the company’s total average coal sales prices up to 10.1% to a record $56.89/ton.

Alliance and White Oak Resources, a privately owned company, are in the process of constructing the White Oak No. 1 mine, which is targeted to produce up to 6.5 million tons a year when it goes into full production in 2014.

Alliance plans to invest more than $525 million in White Oak over several years, with the No. 1 mine expected to provide a total royalty stream of at least $400 million to Alliance over 20 years. The partnership also may develop additional mines in southern Illinois.

Under their agreement, White Oak will pay a newly created Alliance subsidiary, Alliance WOR Properties, a “fully recoupable minimum monthly royalty of $1.625 million during the period starting January 1, 2015, through December 31, 2034, subject to certain renewal options for White Oak,” Alliance said in a recent filing with the U.S. Securities and Exchange Commission.

In late November, Alliance formally dedicated Gibson South, a $200 million mine expected to begin production in 2014 with a work force of 330 people. By 2015, the mine should be producing at the rate of 3.3 million tons annually. Gibson County Coal, an Alliance subsidiary, will operate Gibson South. It currently operates a sister deep mine, Gibson North, just a few hundred yards away. Gibson South will be a continuous miner operation.