MINNEAPOLIS (AP) â¿¿ Coal-mining stocks dropped sharply on Friday on Patriot Coal Corp.'s plans for a big production cut, and on persistently low prices for natural gas, which competes with coal for use by power plants. Patriot said the cuts to its coal production in West Virginia were because of weak demand for metallurgical coal that is used to make steel. It did not say how much volume would drop. Natural gas prices are at historic lows as U.S. supplies have grown more than expected. That has prompted some energy producers to switch power plants to natural gas supplies instead of coal. Patriot shares fell $1.15, or 13 percent, to $7.85 in afternoon trading. Peabody Energy Corp. shares dropped $1.83, or 4.9 percent, to $35.33, and Consol Energy Inc. was down $2.79, or 7.6 percent, to $33.79. Alpha Natural Resources fell $2.37, or 10.5 percent, to $20.18, and Arch Coal Inc. fell $1.67, or 10.7 percent, to $13.99. Penn Virginia Resources fell 43 cents, or 1.6 percent, to $26.11. Sterne Agee analyst Michael S. Dudas wrote that labor and other expenses for U.S. producers of metallurgical coal have increased sharply over the last two years. With prices coming down, production cuts will help coal prices find a floor, he wrote.
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