Jefferies & Co began coverage of Alpha Natural Resources Inc with a buy rating, saying the coal miner seemed well positioned to gain from the recovery in the coal markets, expected during 2010 to 2012.

Analyst Michael Dudas said he expects the company to gain market share and execute strategic transactions as U.S. thermal coal fundamentals appear to bottom and global met coal fundamentals begin to improve.

As the largest producer and exporter of metallurgical coals in the U.S., Alpha should be poised to increase margins and volumes as international pig iron production recovers to more normal levels, Dudas wrote in a note to clients.

Alpha's product mix is likely to leverage recovering thermal and met coal markets and drive cash flow generation, the analyst said.

The analyst set a price target of $50 on the stock of Alpha, a major U.S. steam and met coal producer which recently purchased rival Foundation Coal Holdings Inc.

Shares of the company closed at $38.90 Monday on the New York Stock Exchange. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Anil D'Silva)

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