Xinergy Ltd., a Central Appalachian coal producer, announced that its wholly-owned subsidiary, South Fork Coal Company, LLC, received requisite approvals to begin construction of its preparation plant and rail loading facility at its mid-volatility metallurgical coal project in Greenbrier County, W.Va.

The company will begin site preparation work immediately and plans to commence construction during the 2012 fourth quarter. Construction of the preparation plant and rail loading facility is expected to take six to nine months at a capital cost of approximately US$20 million. Consistent with prior guidance, the company expects to produce 300,000 to 400,000 tons of premium-quality, Sewell seam mid-vol metallurgical coal in 2013, reflecting a rate of approximately 50,000 tons per month following completion of the preparation plant and rail load-out. Xinergy continues to anticipate cash costs of approximately $100/ton once this production rate is achieved, and believes South Fork will have capacity of approximately 80,000 tons per month.

Matt Goldfarb, Xinergy’s CEO, commented, "Today marks a significant milestone for our company, reflecting the perseverance and commitment of our entire West Virginia team. Bernie Mason, our President, and our engineering and permitting group in West Virginia have done an admirable job in the face of an extremely challenging regulatory environment in advancing our South Fork mid-vol project to position the company for a long-awaited step-change in our production profile. Despite near-term weakness in metallurgical coal pricing, the company remains bullish on the long-term fundamentals for the global steel industry and, in particular, believes that its ultra-premium South Fork mid-vol met reserves will preserve a niche market position for Xinergy through the cycle."