CONSOL Energy (NYSE: CNX) said June 29 that it has issued notice under the Worker Adjustment and Retraining Notification Act of a layoff at its Fola Operations near Bickmore, W.Va., that is expected to slash 2012 production by 800,000 tons.
It is expected that the layoffs will impact approximately 318 employees at Fola and will occur during a 14-day period beginning Aug. 30. Surface, reclamation, underground and general office staff will be affected.
CONSOL expects 2012 production to be reduced by about 800,000 tons due to this cutback. To date in 2012, the Fola complex has produced 1.05 million tons of coal. Annual direct estimated economic impact of the Fola Complex is $165m.
“The decision to idle our Fola operations is a difficult one, but in an effort to manage our inventory and to balance coal production with expected utility demand and shipping schedules, we are faced with making adjustments which unfortunately will impact our workforce,” said Nicholas DeIuliis, CONSOL President. “The domestic market for coal remains soft due to weak economic growth and activity. The warm winter resulted in the growth of our utility customers’ stockpiles and their inability to accept committed coal shipments. Additionally, the escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry.”
In the interim period until the layoff takes effect, underground operations will continue, however, Fola surface employees will be reassigned from mining to reclamation work. The only coal to be mined on the surface will be coal incidental to reclamation. Following the initial 60-day period, mining will be idled at the underground operations. Reclamation will begin in areas not necessary to future operations and some employees will be retained to assist in those efforts.
This is yet another response by a major U.S. coal producer to a sustained slump in steam coal markets. CONSOL said June 22 that it will extend the annual miners’ vacation period at its Blacksville No. 2 and Robinson Run longwall mines in northern West Virginia, resulting in 300,000 tons of deferred production. To date in 2012, Blacksville No. 2 has produced 1.27 million tons of coal, while Robinson Run has produced 2.4 million tons in that same time period. Both produce coal out of the high-sulfur Pittsburgh No. 8 coal seam.
CONSOL is a Pittsburgh-based producer of both coal and natural gas, with 12 bituminous coal mining complexes in four states.