The Tulsa, Okla.-based company expects to produce about 40 million tons of coal in 2014, eclipsing its estimated total of 39 million tons in 2013. By 2016, Alliance said its annual output should hover around 50 million tons.

The forecasted increases mainly are attributed to two new underground thermal coal IB mines that should begin to hit their stride by late 2014 — Gibson South near Princeton in Gibson County, Ind., and White Oak No. 1 near McLeansboro in Hamilton County, Ill. Once in full operation, the two mines are projected to add more than 10 million tons of additional production annually, helping Alliance to solidify its position as a low-cost producer.

White Oak No. 1 began producing limited amounts of coal in 2013 and is operated by privately owned White Oak Resources LLC, formed in 2006 to access more than 1.3 billion tons of recoverable coal reserves in Hamilton County. Alliance took a major financial interest in White Oak 1 several years ago and essentially has the right to market the mine’s coal. The mine’s new longwall system is scheduled to start running by next summer or fall, at which time production should ramp up rapidly to more than 6 million tons a year.

At least some of Gibson South’s coal reserves have lower sulfur content than traditional IB coal and, as a result, the mine is designed to serve both foreign and domestic markets. Gibson South, a continuous miner operation, eventually could turn out slightly more than 5 million tons a year at peak production.

“We continue to see growth opportunities in 2014, 2015 and 2016,” said Brian Cantrell, Alliance’s senior vice president and chief financial officer, at the Cowen Global Metals Mining Materials Conference in New York in December. “We think fossil fuels will be the predominant power source for electrical generation in this country for quite some time. We expect natural gas will stay at price levels that will allow our company to compete.”

In fact, with natural gas recently hitting $4.50 a million British thermal units on the New York Mercantile Exchange, some analysts predict electric utilities in the U.S. will switch back to coal from gas in 2014. 

Cantrell added, “We continue to see opportunities for growth even in a flat market for demand.”

Much of that optimism is rooted in Alliance’s presence in the IB. In 2013, 82% of the company’s production came from mines in western Kentucky, southern Indiana and Illinois. Northern Appalachia contributed 13% with the remainder from central Appalachia.

Alliance also expects more production in 2014 from its Tunnel Ridge longwall mine in Pennsylvania and West Virginia. The mine began operating in 2012.

Cowen and Company, in a recent report, also was upbeat in its assessment of Alliance’s future. Alliance is “set for strong growth in 2014 on the back of Gibson South, the continued Tunnel Ridge ramp, and the investments in White Oak” with the new longwall commissioning targeted for 2014, Cowen said.

Alliance’s other major producing mines include River View, Dotiki, Hopkins County Coal, Warrior Coal and Onton No. 9 in western Kentucky, Gibson North in southern Indiana, and Pattiki in southern Illinois.