In the final three months of last year, CONSOL produced 15.3 million tons of coal and is forecasting output of 15.5-15.9 million tons in the first quarter of 2012. The Pittsburgh-based company blamed declining natural gas prices for its decision to pare back spending this year from a prior projection of $1.7 billion. Even with the cutback, however, the 2012 capex would surpass last year’s total of $1.4 billion.

CONSOL continues to see burgeoning export opportunities into Asia, particularly for metallurgical-quality coal. J. Brett Harvey, CONSOL chairman and CEO, told analysts during a January 26 fourth quarter earnings call his company is “becoming a very strong swing supplier to Asia.” CONSOL always has been a “very strong supplier to the Atlantic markets,” he said. “The fastest growing commodity worldwide is coal, so that gives us a very strong leg up. Being the low-cost producer, we can distribute this cost at very high margins from our well-capitalized position in the United States.”

As he looked ahead to the remainder of 2012, William J. Lyons, CEO, principal accounting officer and executive vice president, CONSOL, said coal demand expectations are somewhat murky. Nevertheless, CONSOL is roughly about 90% contracted for the year. “That 6 million tons that is unsold—about 40% of that is tons that we will sell on a quarterly basis into Asia,” he said.

BMX is targeted to begin producing at the rate of 5 million tons a year in the first quarter of 2014. Of the $205 million CONSOL has budgeted for mine upgrades this year, much of that is expected to be spent on BMX. The BMX expansion project has a total price tag of about $500 million.

Lyons said the good thing about BMX is that the mine “can be whatever we want it to be to go to the highest market possible. It can be 100% steam coal” if needed for the domestic market. Or, “it could go to export as a great thermal coal, or it can be accepted around the world as a high-vol crossover” coal.

Potential markets for BMX, in Northern Appalachia, include Asian mills, European generators, Brazilian mills and domestic generators.