Coal

After a year which focused on reducing operating costs
and increasing efficiencies, BethEnergy has positioned itself for further improvements at its two mining operations during 1996.

We anticipate that 1996 will be a positive year both in operating performance and in attaining of our business goals at Eagle Nest and High Power Mountain, both of which are located in West Virginia.

HPM, a supplier of trade or steam coal used by the power generation industry, has also established itself as a major supplier of coal for the technologically advanced coal injection process being used by today's steelmaking industry and plans to expand its participation in this particular area.

And to meet its overall customer obligations in 1996, HPM is in the process of securing agreements with contract deep mine suppliers who will develop mines on HPM property. HPM currently has a workforce numbering about 30.

Eagle Nest, which underwent a restructuring and downsizing last August, ended the year with significant operating improvements and also set records for coal production. This positive trend is expected to continue this year as Eagle Nest continues to supply metallurgical grade coal for cokemaking both in this country and abroad. Eagle Nest, which employs 350 hourly and salaried personnel, is also exploring other potentials relative to its future in the mining business.

Overall, BethEnergy is projecting coal shipments of 4.4 million tons in 1996.