Operating affiliates of Alpha Natural Resources (NYSE: ANR) notified employees on May 22 of the expected idling of the mining and processing operations where they work.
Under the requirements of the federal Worker Adjustment and Retraining Notification (WARN) Act, notices were given to 439 employees at Rockspring Development‘s Camp Creek Underground Mine and Processing Plant in Wayne County, West Virginia, regarding the expected idling of those facilities based on the mine operator’s current assessment of market conditions.
Three other Alpha-affiliated mine operators had announced the prior week that reductions in force were taking place at their locations due to sustained weak market conditions and government regulations that have challenged the entire Central Appalachian coal industry. A total of 71 employees were impacted:
- Enterprise Mining‘s EMC #9 underground mine in Knott County, Ky., and Roxana Prep plant in Letcher County, Ky., reduced the workforce by 17.
- Knox Creek Coal‘s Tiller #1 underground mine in Tazewell County, Va., eliminated 35 positions.
- Mill Branch Coal‘s Dorchester and North Fork underground mines in Wise County, Va., and Letcher County, Ky., reduced the number of workers by 19.
Alpha said: “These actions are being triggered by persistent weakness in U.S. and overseas coal demand and depressed price levels, along with government regulations that are causing electric utilities to close existing coal-fired power plants and forego construction of new coal-fired capacity. Excess supply of coal worldwide also has contributed to sustained price weakness.”
Alpha Chairman and CEO Kevin Crutchfield said: “This is an unprecedented time in the coal industry and Alpha continues to take difficult but necessary actions to ensure that our production is aligned with the reduced market demand we see today and anticipate in the future. These actions are consistent with steps we have taken in the past to build a smaller but more sustainable portfolio of mining assets across our operational footprint.”
Alpha Executive Vice President of Mining Operations, Keith Hainer, echoed that the May 22 Camp Creek action is an indication that production and expenses continue to be carefully analyzed to meet current and expected future demand. “We are working to maintain flexibility and our coal-producing affiliates are rationalizing their operations and cost structure to manage effectively through these challenged markets,” Hainer said. “These are hard decisions because they affect good people, but these changes are necessary to help address the challenges that Alpha is facing.”
U.S. Mine Safety and Health Administration data shows that the Camp Creek deep mine produced 535,838 tons in the first quarter of this year and 2.3 million tons in all of 2014.
Virginia-based Alpha Natural Resources is one of the largest and most regionally diversified coal suppliers in the United States. With affiliate mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming, Alpha supplies metallurgical coal to the steel industry and thermal coal to generate power to customers on five continents.