Alpha Natural Resources says its decision to scale back coal production and idle some mines will cost 168 Kentuckians and 152 West Virginians their jobs in the coming weeks.
Alpha spokesman Ted Pile said this week that another 52 Kentucky employees and an additional 182 West Virginia employees are being offered work at other Alpha locations.
In Kentucky, the Cave Spur and Perkins Branch underground mines in Harlan County are being closed immediately. The Coalgood surface mine, also in Harlan County, will be closed by the middle of this year, and the Big Branch West surface mine in Knott County will close in early 2013.
The three Harlan County mines were formerly owned by Massey Energy, which Alpha bought early last year. The Knott County mine is operated by Alpha’s Enterprise Mining division.
Media outlets say the West Virginia mines being idled include the No. 2 Gas Mine in Kanawha County and the Randolph Mine in Boone County, both underground operations.
Hours are being cut at Boone’s Black Castle surface mine and the Progress/ Twilight surface mine, and at Logan County’s Camp Branch surface mine.
The Alloy Powellton Mine in Fayette County is eliminating one underground section.
Virginia- based Alpha has more than 180 mines and processing plants in five states.
Alpha cited poor market conditions as the reason for the cuts in a news release issued late last week.
“Alpha’s Central Appalachian businesses are seeing more electric utilities switch from thermal coal to natural gas to take advantage of gas prices at 10-year lows. A series of federal regulatory actions also have prompted utilities to implement plans for shutting down a number of generating stations that have traditionally run on coals sourced from Central Appalachia,” the news release said.
“When completed, the adjustments are expected to reduce annual coal production by approximately 4.0 million tons, most of which originates on the CSX rail system,” the release continued. “The total includes approximately 2.5 million tons of thermal coal and 1.5 million tons of lower quality, high-volatility metallurgical coal. Eastern Kentucky operations will scale back thermal coal production by about 1.5 million tons while the remaining reductions will occur in southern West Virginia.”
Kentucky Coal Association president Bill Bissett told Louisville radio station WFPL that mine closures in eastern Kentucky are occurring because of the unseasonably warm weather being experienced by much of the United States.
“When we have those kinds of temperatures in a winter season, you have less demand for electricity and thus less demand for coal,” Bissett said. “So, this is a market fluctuation, it’s not like the attacks we’re seeing out in Washington D.C., it’s more things we can’t control or really predict with the nature of the weather.”
Pile told Charleston (W.Va.) Gazette coal reporter Ken Ward that the company doesn’t take the layoffs lightly.
“ While this was a decision driven by the reality of the tough market for coal, it’s still a hard decision because it affects working families,” Pile told Ward. “We’re trying to help by giving all displaced workers 60 days of continued pay and benefits even though it’s not required. Hopefully that’ll help them transition.”
Financial services group Credit Suisse’s has warned that U. S. thermal markets, particularly in Central Appalachia, will remain weak in the near-term.
Although the Dow Jones industrial average ended at its highest level Tuesday since May 2008, most coal stocks, including Alpha, were down.
The Dow rose 33 points to close at 12,878. It hadn’t closed higher since May 2008, before the financial crisis. It had been down as many as 62 points in the first half-hour of trading.
Alpha’s stock fell $1.23 Tuesday to $22.32. Consol Energy 19 cents to $36.74, while Arch Coal fell 49 cents to $15.22. James River Coal fell 62 cents to $6.86. Meanwhile, Rhino Resource Partners was up 19 cents to $20.39.
Compiled from Mountain Eagle and Associated Press reports.