Corsa Coal cuts back production, shutting two Pennsylvania mines

Corsa Coal Corp. (TSXV: CSO) said Jan. 9 that the ongoing integration of recently acquired PBS Coals Ltd. into the company’s Northern Appalachian Division (NAPP Division) and the continued weakness in global metallurgical coal markets has resulted in the decision to eliminate approximately 130 full time positions or approximately 25% of the NAPP Division workforce.

As a result of this decision, the Kimberly Run and Barbara mines in Pennsylvania have been idled and placed under management review for closure. Certain personnel and equipment from these mines will be transferred to the Casselman (Maryland) and Quecreek (Pennsylvania) mines which are the company’s lowest cost metallurgical coal operations. The additional personnel and equipment are expected to allow for an increase in production and operational efficiency at the Casselman and Quecreek mines.   

“We regret the need to take today’s actions, however, we anticipate these moves will improve the overall cost structure of the NAPP Division while still maintaining premium quality metallurgical coal specifications,” said George Dethlefsen, Corsa’s Chief Executive Officer. “The acquisition of PBS last August provided the Company with a large portfolio of active and development mines. Today’s moves are part of the ongoing integration of PBS as well as an effort to rationalize production in response to market conditions. The Company will shift its near term metallurgical coal production to its lowest cost operations while preserving other reserves for future development at a time when the market is stronger.”

U.S. Mine Safety and Health Administration data shows that Kimberly Run and Barbara are both deep mines in Somerset County, Pa., and that both came in the PBS Coals buy, since they are listed under PBS affiliate RoxCoal Inc. Kimberly Run produced 353,390 tons in the first three quarters of 2014 and 652,325 tons in all of 2013, while Barbara produced 13,573 tons in the first three quarters of 2014 and 59,689 tons in all of 2013.

Corsa is one of the leading suppliers of premium quality met coal, an essential ingredient in the production of steel. Its core business is supplying metallurgical coal with the highest safety, yield, and strength characteristics to domestic steel producers while being a strategic source of supply in the Atlantic and Pacific basin markets. Corsa also offers a high heat content, low delivered cost coal to major utilities and industrial users in the Southeast region of the U.S.

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.