UPDATE 2-Walter Energy forecasts drop in metallurgical coal volume

Tue Feb 17, 2015 1:21pm EST
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* Sees met coal sales volume falling 10 pct in 2015

* 4th-qtr revenue, net loss miss estimate

* Shares fall as much as 11 pct (Adds details from conference call, analyst comment, background, updates shares)

By Manya Venkatesh

Feb 17 (Reuters) - Walter Energy Inc forecast a 10 percent drop in sales volume of steel-making coal for 2015 due to sluggish Chinese and European demand, sending its shares down as much as 11 percent.

The company also reported a bigger-than-expected fourth-quarter loss as revenue slumped 39.5 percent, reflecting a fall in metallurgical coal selling prices and a drop in sales volumes as a result of suspending mining operations in Canada last year.

"Met coal prices remain weak and are yet to show meaningful signs of recovery," Chief Executive Walt Scheller said on a post-earnings conference call on Tuesday.

Walter had said in April it would stop production at its Wolverine and Willow Creek mines in British Columbia and temporarily lay off about 700 employees.

The company had bought these mines as part of a C$3.3 billion acquisition of Canada's Western Coal Corp in 2010 to take advantage of the surging global steel production at the time.   Continued...