re: Ann: ATTILA SIGNS OPTIONS TO ACQUIRE 70% ... Walter...

re: Ann: ATTILA SIGNS OPTIONS TO ACQUIRE 70% ... Walter Industries Announces Investment in Alabama Coal Mining Joint Venture
TAMPA, Fla., Oct 26, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Walter Industries, Inc. (NYSE: WLT) announced today that United Land Corporation, a wholly owned subsidiary of the Company, executed a definitive agreement to invest up to $19.6 million in Kodiak Mining Company, LLC, a joint venture established to operate an unrelated underground coal mine in Shelby County, Ala. The mine has approximately 4.3 million tons of reserves which can be sold as high vol, hard coking coal or high BTU low sulfur steam coal.

"This is an outstanding opportunity to diversify our coal production while leveraging strong demand in metallurgical and steam coal markets," said Gregory E. Hyland, Chairman and CEO of Walter Industries. "The joint venture provides an immediate source of incremental coal production and strong potential for future mining opportunities."

United Land owns 51 percent of the joint venture, with the remaining 49 percent owned by R&S Coal, LLC. R&S Coal is controlled by Jimmie R. Ryan, who contributed the mineral rights and certain mining equipment to Kodiak. Ryan, who has significant coal mining experience, will serve as president of Kodiak. Kodiak's operating results will be consolidated into Walter Industries' financial statements and will be included in the Natural Resources segment.

Under the terms of the agreement, Kodiak has the rights to mine approximately 4.3 million tons of underground reserves, with an opportunity to mine additional coal if economically feasible. Total production is expected to be approximately 700,000 tons per year until the reserves are exhausted or a new mining area is developed, with United Land entitled to 51% of this volume. The reserves will be mined by a third-party contractor that is owned and operated by Ryan, and the coal will be marketed through another wholly owned Walter Industries subsidiary, Blue Creek Coal Sales, Inc.


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