Coal producer, Patriot Coal Corporation (PCX) is all set to venture into the Asian coal markets with its first sale of $1.5 million tons of metallurgical coal to steel mills in the Pacific Rim.

The company said that the coal will be sourced primarily from its Panther and Winchester mines. The sale is arranged through a third party, Xcoal, which has an extensive presence in Asian markets. The company expects coal deliveries to begin in April 2010 through early 2011.

Furthermore, the company now expects 2010 met coal shipments to be more than 7.0 million tons, up 30% from total met shipments in 2009. Of this, nearly 2.0 million of volume is expected to come from the Panther mine. Additionally, the company expects to see additional opportunities for met coal sales to Asia as 2010 unfolds.

Patriot Coal is a leading coal producer in the eastern U.S., having substantial thermal as well metallurgical coal reserves in the Appalachian region. This transaction opens up new markets for Patriot, and also provides it considerable upside in selling additional Panther coal in global metallurgical coal markets.

Coal demand in the Pacific markets is growing rapidly, with supplies increasingly tight. Because of demand in Asia, some metallurgical coal supply from Australia, Canada and the U.S. that normally would have moved into the Atlantic basin is diverted into the Pacific basin. Furthermore, prices for seaborne metallurgical and thermal coals are moving higher as China and India are rapidly increasing imports and traditional Asian-based customers are returning to pre-recession growth levels.

With the improved economics of the Pacific markets, we believe Patriot will benefit from its endeavor into the growing Asian markets.

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