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PITTSBURGH, Sept. 22, 2003 -- CONSOL Energy Inc., a producer of high-Btu bituminous coal and coalbed methane gas, has entered into an 18 year, 52 million ton coal sales agreement to supply Pittsburgh 8 seam coal, principally from the Bailey mine in southwestern Pennsylvania, to be used at three coal-fired electric power plants owned by FirstEnergy Generation Corp., a subsidiary of Akron, Ohio- based FirstEnergy Corp.
Under the agreement, coal from CONSOL Energy's Blacksville #2 Mine will provide one million tons of coal in 2004 for the Mansfield, East Lake and Sammis plants. Beginning in 2005, CONSOL Energy's Bailey Mine will provide 3 million tons per year of coal to be used at the plants. In January of this year, CONSOL Energy and FirstEnergy Generation agreed to a 4.5 million ton supply contract for coal primarily used at FirstEnergy's Mansfield Plant near Shippingport Pennsylvania.
"Our substantial reserve base and the proximity of our mines to customer plants are the key ingredients in making an agreement like this possible," said J. Brett Harvey, president and chief executive officer. "There are few, if any, coal producers east of the Mississippi River who can provide their customers the security of supply at market prices over this period of time."
The sales price under the agreement was not disclosed. The agreement includes a price re-opener provision every three years, beginning in 2007. In 2002, the Bailey Mine ranked as the largest underground mine in the United States, producing 9.7 million tons of clean coal. The Blacksville #2 Mine was the 12th largest underground mine in the United States, producing 4.8 million tons in 2002.
"We are pleased to be able to expand our relationship with FirstEnergy to provide coal-fired power to America's industrial heartland," Harvey continued. "Both companies recognize the long-term role that coal must play in meeting our country's electric power needs."
CONSOL Energy Inc. is a producer of high-Btu bituminous coal, and an exporter of U.S. coal. CONSOL Energy has 20 bituminous coal mining complexes in seven states and in Australia. In addition, the company is one of the largest U.S. producers of coalbed methane, with daily gas production of approximately 135 million cubic feet. The company also produces electricity from coalbed methane at a joint-venture generating facility in Virginia. CONSOL Energy has annual revenues of $2.2 billion. It received a U.S. Environmental Protection Agency 2002 Climate Protection Award, and received the U.S. Department of the Interior's Office of Surface Mining 2002 National Award for Excellence in Surface Mining for the company's innovative reclamation practices in southern Illinois. Additional information about the company can be found at its web site: www.consolenergy.com .
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