1171486--2/27/2006--NATURAL_RESOURCE_PARTNERS

related topics

{gas, price, oil}

{cost, contract, operation}

{cost, operation, labor}

{loss, insurance, financial}

{cost, regulation, environmental}

A substantial or extended decline in coal prices could reduce our coal royalty revenues and the value of our reserves. Our lessees coal mining operations are subject to operating risks that could result in lower coal royalty revenues to us. We depend on a limited number of primary operators for a significant portion of our coal royalty revenues, and the loss of or reduction in production from any of our major operators could reduce our coal royalty revenues. We may not be able to terminate our leases, and we may experience delays and be unable to replace lessees that do not make royalty payments. If our lessees do not manage their operations well, their production volumes and our coal royalty revenues could decrease. Adverse developments in the coal industry could reduce our coal royalty revenues and, due to our lack of asset diversification, could substantially reduce our total revenues. Any decrease in the demand for metallurgical coal could result in lower coal production by our lessees, which would reduce our coal royalty revenues. We may not be able to expand and our business will be adversely affected if we are unable to replace or increase our reserves or obtain other mineral reserves through acquisitions. Any change in fuel consumption patterns by electric power generators resulting in a decrease in the use of coal could result in lower coal production by our lessees, which would reduce our coal royalty revenues. Competition within the coal industry may adversely affect the ability of our lessees to sell coal, and excess production capacity in the industry could put downward pressure on coal prices. Lessees could satisfy obligations to their customers with coal from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments. Fluctuations in transportation costs and the availability or reliability of transportation could reduce the production of coal mined from our properties. Our reserve estimates depend on many assumptions that may be inaccurate, which could materially adversely affect the quantities and value of our reserves. Our lessees work forces could become increasingly unionized in the future. Our lessees are subject to federal, state and local laws and regulations that may limit their ability to produce and sell coal from our properties. A lessee may incorrectly report royalty revenues, which might not be identified by our lessee audit process or our mine inspection process or, if identified, might be identified in a subsequent period.

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1171486--2/27/2006--NATURAL_RESOURCE_PARTNERS_LP