CHARLESTON, W.Va. - Despite the slowing economy, coal producer Massey Energy Co. remains committed to an ambitious expansion plan that added 15 new mines over the past year, company officials said Friday.

The Richmond, Va.-based company also expanded seven existing mines, hired almost 900 miners and bought a fleet of surface mining equipment over the past 12 months as part of a plan to increase coal output to 50 million tons by 2010, from approximately 40 million last year.

The weakening economy has prompted Massey to back off a bit on shipment and price projections, but Chief Executive Don Blankenship told analysts he remains bullish on expansion during a conference call to discuss third-quarter earnings.

Investing in new production is a better use of capital than buying competitors or simply keeping money in the bank, Blankenship said. Massey spent $230.3 million in cash on capital spending during the third quarter, up from $60.1 million a year earlier. For the full year, the company plans to spend between $650 million and $700 million on capital projects.

Steelhead Partners analyst J.D. Kritser questioned Blankenship's logic in the face of falling coal company valuations.

"I can't imagine that [capital expansion] plans would seem reasonable if you can go buy people, even at a premium, at the valuations we see today in the market," Kritser said.

Blankenship countered that expansion is a better option for now.

"I doubt many of the boards would render their companies at the current valuation if you attempted to buy them. It would be a bigger deal than we could pay cash for and our currency of stock would also be devalued," he said. "The opportunity to invest $200 million to $300 million in two to three year paybacks is good business in my opinion, particularly today."

Massey also may use some of the $877.7 million in cash and short-term investments it had at the end of the third quarter to repurchase stock. Its shares have fallen approximately 76 percent since peaking at $95.70 last summer. Repurchasing stock will discussed by the board of directors in November, Blankenship said.

Separately, Massey has scaled back expectations, saying Thursday it is projected 2008 shipments of 41.5 million tons. Previously it had projected up to 43 million tons. Massey also lowered average price projections to an average of $64 to $65 a ton, down from $65 to $66 a ton.

Production estimates of 46 million to 48 million tons in 2009 and 50 million in 2010 remain unchanged, but Massey has lowered price estimates for both years. It now expects average prices in a range of $78 to $82 per ton next year, down from $84 to $92. In 2009, Massey's expecting prices to average from $90 to $130 a ton, down from $115 to $132.

Massey operates mining complexes in West Virginia, Virginia and Kentucky. Its stock rose $2.68, or 13 percent, to $23.09 Friday.

CHARLESTON, W.Va. - Despite the slowing economy, coal producer Massey Energy Co. remains committed to an ambitious expansion plan that added 15 new mines over the past year, company officials said Friday.

The Richmond, Va.-based company also expanded seven existing mines, hired almost 900 miners and bought a fleet of surface mining equipment over the past 12 months as part of a plan to increase coal output to 50 million tons by 2010, from approximately 40 million last year.

The weakening economy has prompted Massey to back off a bit on shipment and price projections, but Chief Executive Don Blankenship told analysts he remains bullish on expansion during a conference call to discuss third-quarter earnings.

Investing in new production is a better use of capital than buying competitors or simply keeping money in the bank, Blankenship said. Massey spent $230.3 million in cash on capital spending during the third quarter, up from $60.1 million a year earlier. For the full year, the company plans to spend between $650 million and $700 million on capital projects.

Steelhead Partners analyst J.D. Kritser questioned Blankenship's logic in the face of falling coal company valuations.

"I can't imagine that [capital expansion] plans would seem reasonable if you can go buy people, even at a premium, at the valuations we see today in the market," Kritser said.

Blankenship countered that expansion is a better option for now.

"I doubt many of the boards would render their companies at the current valuation if you attempted to buy them. It would be a bigger deal than we could pay cash for and our currency of stock would also be devalued," he said. "The opportunity to invest $200 million to $300 million in two to three year paybacks is good business in my opinion, particularly today."

Massey also may use some of the $877.7 million in cash and short-term investments it had at the end of the third quarter to repurchase stock. Its shares have fallen approximately 76 percent since peaking at $95.70 last summer. Repurchasing stock will discussed by the board of directors in November, Blankenship said.

Separately, Massey has scaled back expectations, saying Thursday it is projected 2008 shipments of 41.5 million tons. Previously it had projected up to 43 million tons. Massey also lowered average price projections to an average of $64 to $65 a ton, down from $65 to $66 a ton.

Production estimates of 46 million to 48 million tons in 2009 and 50 million in 2010 remain unchanged, but Massey has lowered price estimates for both years. It now expects average prices in a range of $78 to $82 per ton next year, down from $84 to $92. In 2009, Massey's expecting prices to average from $90 to $130 a ton, down from $115 to $132.

Massey operates mining complexes in West Virginia, Virginia and Kentucky. Its stock rose $2.68, or 13 percent, to $23.09 Friday.