Fast Company: Sustaining a Business ModelIn the Rapidly Changing World of Coal Mining

The William N. Poundstone LectureMike Quillen, Chairman & CEO, Alpha Natural Resources Inc.

November 15, 2007

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Statements in this presentation which are not statements of historical fact are “forward-looking statements” within the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, Alpha Natural Resources at the time this presentation was made. Although Alpha Natural Resources believes that the assumptions underlying such statements are reasonable, it can give no assurance that they will be attained. Factors that could cause actual results to differ materially from expectations include the risks detailed under the caption “Risk Factors” in the company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in other materials filed by the company from time to time with the Securities and Exchange Commission.

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2002 2003 2004 2005 2006

Acquired Pittston Coal

assets

ANR Holdingsformed

Acquired AMCI assets

Acquired Coastal Coal

assets

Acquired Mears assets

Acquired Progress assets

Acquired Nicewonder

assets

Acquired Cooney Bros.

assets

Acquired Moravian Run

assets

IPO

Investmentin Gallatin lime plant

2007

Acquired Mingo Logan

assets

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A fast growth company

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Coal Sales by Type

Metallurgical10.0mm tonsSteam

19.1mm tons34%

66%

Production by Region

Northern Appalachia4.8 mmtons

81% 19%Central

Appalachia20.0 mm tons

81% 19%

81% 19%

2006 production profile

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Belgium

Brazil

Bulgaria

Canada

France

Egypt

Finland

Hungary

India

ItalyJapanKorea

Netherlands

Romania

Spain Turkey

United Kingdom

New Orleans, LA

Sandusky, OH

Conneaut, OH

Newport News, VA

Lambert’sPoint/Norfolk, VA

Baltimore, MD

Ashtabula, OH

Key Alpha Brands Produced in West Virginia & Shipped Around the WorldLitwar

Kepler

Herndon

Cucumber

Brooks Run

Kingwood

A worldwide name in metallurgical coal

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High value reserves

As of Dec. 31, 2006; does not include Mingo Logan-Ben Creek reserves acquired June 2007

Paramont (VA)

Dickenson-Russell (VA)

Kingwood (WV)

Brooks Run (WV)

Welch (WV)

AMFIRE (PA)

Enterprise (KY)

141.7

27.7

28.0

25.2

89.3

64.5

151.1

93%

100%

61%

100%

100%

55%

66%

Business Unit Reserves(millions of tons)

LowSulfur(< 1.5%)

HighBtu

(> 12,500)

98%

100%

100%

40%

100%

85%

91%

21.1 100%

Business Unit Reserves(millions of tons)

LowSulfur

(< 1.5%)

HighBtu

(> 12,500)

Alpha Total 548 82% 91%

43%

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33%

44%

14%

9%

2006 Coal Production, by State

Alpha’s production by state

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West Virginia

PennsylvaniaVirginia

Kentucky

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$70 million severance tax paid since 2004

$0

$5

$10

$15

$20

$25

2004 2005 2006 2007 YTD

Severance Tax Payments in West Virginia

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$10.7

$19.8

$14.8

$24.5( millions of dollars )

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$23$48 $63

$0

$20

$40

$60

$80

$100

$120

$140

$160

2004 2005 2006

Capital Expenditures - West Virginia Operations

$72

$122$132

Alpha reinvests in its W. Va. businesses

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( millions of dollars )

All Other StatesWest Virginia

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Alpha furnishes good paying jobs in W. Va.

Total Alpha Payroll in West Virginia(millions of dollars)

$32.7

$63.6

$77.8

$88.9

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2004 2005 2006 2007E

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Today’s discussion

Competition from other fuelsEconomicsProductivityCostsSafetyLaborEnvironmental: permitting, post mining land use … and global warmingPublic perception … and politics

Our business faces a number of challenges …… all require the company to be fast on its feet

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Coal : the dominant source of electricity

Percentage of U.S. Electricity Generation, by Fuel Type - 2006

COAL49%

OTHER3%

OIL2%HYDRO

7%NAT GAS

20%

NUCLEAR19%

SOURCE: U.S. Energy Information Administration12

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Coal : the economical source of electricity

SOURCE: U.S. Energy Information Administration, March 2007 Energy Review

West Virginia retail electricity rates are among

the nation’s lowest

___________

• 98% of West Virginia’s

electricity comes from coal

• Residents pay $0.05 per kWh,

57% of the national average of

$0.09 per kWh

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Challenge: economics of the coal business

67.1%778.7Total Top 10

2.1%24.8Alpha Natural Resources

2.5%29.4Westmoreland Coal

2.7%31.5Kiewit Mining Group

3.1%35.6North American Coal

3.4%39.0Massey Energy

5.8%67.4CONSOL Energy

6.2%71.6Foundation Coal

10.9%126.1Arch Coal

11.9%138.1Kennecott Energy

18.5%215.2Peabody Energy

34.0%264.3Total Top 10

2.0%14.8Nerco

2.0%14.9Kerr-McGee

2.0%15.2Utah International

2.0%18.0Anaconda

2.0%18.2A.T. Massey

3.0%19.4Exxon Coal

4.0%28.4Texas Utilities Mining

5.0%40.0Amax

5.0%42.0Consol Energy

7.0%53.4Peabody Energy

Company Company Tons (mm)% of Total U. S. ProductionTons (mm)

% of Total U. S. Production

U. S. Coal Production - 1983 U. S. Coal Production - 2006

Source: National Mining Association

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$(300)

$(200)

$(100)

$-

$100

$200

$300

2006 2005

Free Cash Flow – Public Coal Cos.

SOURCE: Company filings; CitigroupFree cash flow defined as cash flow from operations less capital expenditures, not including acquisitions

(in order of firm market capitalization)

AlphaAB C

E

D

F G$27.3

$78.1

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Economics not always favorable

Millionsof dollars

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Challenge : Productivity is falling

U.S. Coal Mine Productivity Trends

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2

4

6

8

10

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1980 1990 2000 2001 2002 2003 2004 2005 2006 2007

Underground Surface

Short tonsper miner

hour

SOURCE: U.S. Energy Information Administration

3.39 tpmh

10.07 tpmh

11.01 tpmh

4.15 tpmh

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Challenge: Mining costs have shot up

Cost of Coal Sales per Ton, Alpha Mines

$20

$30

$40

$50

Q1 200

4

Q1 200

5

Q1 200

6

Q1 200

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As reported in company SEC filings

$27.20 / ton

$46.05 / ton

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Challenge : Safety - facts vs. perception

Crandall Canyon Mine, UtahAugust 6, 2007

Sago Mine, W. Va.January 3, 2006

Underground emergencies have heightened public fear, created a rush for political action

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Master HeaderSafety : facts vs. perception

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50

100

150

200

250

300

1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006

Fatalities Production

Fatalities U.S. Production (million st)

SOURCE: U.S. Mine Safety & Health Administration

Production - 89% Increase

Fatalities - 81% Decrease

1,400

1,200

1,000

800

600

400

200

0

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U.S. Coal Mine Safety and Production Trends

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Safety : perception vs. reality

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2

4

6

8

10

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U.S. Coal Mine Injuries per 200,000 Employee Hours

1990 2000 2006

10.18

4.46

56 % decrease

SOURCE: U.S. Mine Safety & Health Administration20

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Safety : a rush to legislate

Atmospheric monitoringPrompt accident notification (15 minute)

Withdraw miners during lightning eventPost-accident communications study

Ban on belt air ventilationBelt air study

240psi sealsIncreased seal design & monitoring

Required use of rescue chambersIncreased civil, criminal penalties

Retreat mining studyMine rescue team within 1 hour travel

Flame resistant conveyor beltsSecondary communications system

Reduced respirable dust standard2 hrs. breathable air per miner / caches

S – MINER Act (H.R. 2768)MINER Act

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Challenge : finding tomorrow’s coal miners

The mean age of a U.S. coal miner is 50 years;The median work experience is 20 years

Sources: EIA; NMA; Bureau of Labor Statistics

We will need an estimated 50,000 new coal miners in the next 10 years.

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• Clean Air Act• Clean Water Act• Safe Drinking Water Act• Solid Waste Disposal Act• Federal Land Policy and Management Act• Surface Mining Control and Reclamation Act• Comprehensive Environmental Response, Compensation andLiability Act (CERCLA)

• Toxic Substances Control Act• Resource Conservation and Recovery Act (RCRA)• Migratory Bird Treaty Act• Endangered Species Act

… and then there are state regulations

Challenge : mounting regulatory burdens

Federal Environmental Laws Governing Coal Operations

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Environmental hurdles stack up

It takes up to three years and costs up to $1 million to obtain permits for a single surface mine.

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Reclamation : a ‘Fast Company’ approach

Black Bear #1 Surface Mine - Clintwood, Va.

•Interstate Mining Compact Commission National Mine Reclamation Award

• Appalachian Regional Reforestation Initiative Excellence in Reforestation Award

• Va. Mining Association2006 Reclamation Award

• National Assn. of State Land Reclamationists 2006 National Mine Reclamation Award

• Va. DMLR Excellence in Mining & Reclamation Award

The first natural stream channel to be built on a reclaimed surface mine in Virginia.

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Reclamation : higher-value land use

• Total of 15 miles of rough grade road bed

• Over 6 miles completed; 32 million cu. yards of earth moved

• W. Va. VDOT estimates 50% cost savings over traditional road building process

• Platform for Virginia Coalfields Expressway feasibility study (50 miles)

Project : King Coal Highway, W. Va.

King Coal Highway

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Challenge : the global warming debate

• In 109th Congress, 106 bills, resolutions and amendmentshave been introduced that specifically address globalclimate change and greenhouse gas emissions.

• Plans for building nearly two dozen coal-fired power plants have been cancelled or deferred.

• By 2030, energy demand is expected to grow 30% to 40%in the U.S.

--globally it will grow 50%.

Electricity demand is growing at twicethe pace new supplies are being added.

Where will our energy come from?27

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Alpha could have gone this route… But we went this route…• Formed Alpha carbon team• Formulated climate changeplatform

• Planted 500,000 trees onreclaimed mine lands in 2006

• Researching switchgrass(cellulostic biofuel)

• Testing biodiesel for mining equipment

• Looking at coal to ethanol• Studying possible joint project with Nature Conservancy onterrestrial carbon sequestration

• Joined regional carbon capture &storage research consortium(SECARB)

More than 17,100 American scientists, two-thirds with advanced degrees, have signed a petition which says in part, "There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth's atmosphere and disruption of the Earth's climate."

Climate change …. forces & facts

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Carbon sequestration: how it works

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We’re in this together … let’s solve it together

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www.alphanr.com

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