Walter Minerals, with a capacity of nearly 1.5 million tons, produces coal for the Alabama steam and industrial coal markets.

Walter Minerals operates through two primary businesses: Taft Coal Sales & Associates ("Taft"), a central Alabama surface coal producer with steam, industrial and metallurgical coal reserves, and Tuscaloosa Resources, Inc. (TRI) which has historically produced approximately 800,000 tons of high BTU, primarily low sulfur coal per year for the industrial and electric utility markets.

Taft was acquired in September 2008 and operates a surface steam and industrial coal mine with annual production capacity of approximately 0.6 million tons and has reserves of approximately 4.3 million tons. Included in Taft's reserves are approximately 0.5 million tons of metallurgical coal, which the Company expects to begin mining in 2009. Taft is based in Jasper, Ala.

Tuscaloosa Resources, Inc. (TRI) is located in Brookwood, Ala., near Walter Minerals' barge load-out facility and Jim Walter Resources' existing operations. Tuscaloosa Resources was acquired in August 2007. TRI controls approximately 8.0 million tons of coal reserves.

Finally, Walter Minerals is also developing the Flat Top Mine - is a 600-acre surface coal mine with reserves of approximately 2.3 million tons of steam and industrial coal on land owned by the Company. Development of the mine began in August 2008. The mine is located in Jefferson County, Ala., 11 miles northwest of Birmingham.