A major coal producer is idling several eastern Kentucky mines and laying off 525 full-time workers, blaming continued weak coal markets.
James River Coal of Richmond, Va., is laying off workers at mines in five eastern Kentucky counties: the McCoy Elkhorn complex in Pike and Floyd counties; the Bledsoe complex in Leslie and Harlan counties; and the Long Branch Surface mine in London.
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The state’s Appalachian region in eastern Kentucky has a long history of coal production, but in recent years weak demand, low natural gas prices and stricter federal regulations have hurt mine production.
The slowdown has forced companies to idle mines and lay off workers by the hundreds in eastern Kentucky. The region lost about 4,000 mining jobs in 2012, according to data compiled by the Kentucky Energy and Environment Cabinet.
James River said in a statement the restart of the mines is subject to market conditions.
Republican and Democrat candidates for Kentucky’s U.S. Senate race seized on news of the layoffs Tuesday, saying they are the result of regulatory overreach by the Obama administration.
“The President is leading a war on coal and what that really means for Kentucky families is a war on jobs,” Republican Mitch McConnell, the Senate Minority Leader, said in a written statement. McConnell said President Obama’s jobs proposals are not helping workers in the eastern Kentucky region.
Alison Lundergan Grimes, the Kentucky Secretary of State who is running for the Democratic nomination in the Senate race, said the president needs to develop an environmental policy “that does not threaten Kentuckians’ livelihoods.”
“I will not stand idle as overreaching regulation adversely impacts jobs and middle class families,” Grimes said in a written statement.
Bill Bissett, president of the Kentucky Coal Association, acknowledged that lower natural gas prices and a slow market are hurting production in eastern Kentucky, but said Obama administration policies are also to blame. He said the administration’s policy of enhanced scrutiny of mining permits has disproportionately affected the central Appalachian region, which includes eastern Kentucky and West Virginia.
“There definitely seems to be a scrutiny and focus on eastern Kentucky and West Virginia, more so than any other coalfield or region,” Bissett said. “I hear that time and time again, especially from people that operate in multiple states. And like it or not, that has a chilling effect, not only on the folks who are there, but also on the ones who might (open a mine) there.”
An earnings report last month from James River said its coal sales revenue for operations in central Appalachia totaled $123 million for the quarter that ended on June 30, compared to $233 million for the same period in 2012. The company mines thermal coal for power generation and metallurgical coal used to produce steel. It also has operations in southern West Virginia and southern Indiana.
The company also idled several mines and reduced production at others in March.