Patriot Coal to shut major steam coal operation in West Virginia

Patriot Coal (OTC: PCXCQ), which had already sharply cut coal production since going into Chapter 11 bankruptcy protection in July 2012, said Sept. 10 that it now plans to idle its Logan County complex located near Man, W.Va, reducing thermal coal production by about 2 million tons per year.

Under the federal WARN Act, the company gave 60-day notice on Sept. 10 to affected employees. The operations expected to be idled include the Guyan surface mine and the Fanco prep plant and rail loadout – with about 250 employees being impacted. Efforts are being made to place employees into open positions at other Patriot operations, and the company said it currently anticipates that about 50 employees will be offered jobs at those locations. 

“This is an unfortunate but necessary step to align Patriot’s production with expected sales,” said Patriot President and CEO Bennett Hatfield. “Despite the substantial progress being made in the Patriot reorganization, we still have to contend with the industry-wide challenge of coal prices that have fallen well below production costs at many Central Appalachian mines. Thermal coal markets are extremely weak due to low natural gas prices and costly regulatory changes that have reduced coal-fueled electricity generation capacity.”

U.S. Mine Safety and Health Administration data shows that the Guyan surface mine, listed under Patriot’s Apogee Coal Co. LLC subsidiary, produced 986,612 tons in the first half of this year and 2.2 million tons in all of 2012.

Patriot Coal is a producer and marketer of coal in the eastern U.S, with 11 active mining complexes in Appalachia and the Illinois Basin. It sold 24.9 million tons of coal in 2012.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.