Cliffs cutting the workforces in half at West Virginia, Alabama coal mines

Cliffs Natural Resources, which a few months ago classified its remaining coal mines in West Virginia and Alabama as discontinued operations, announced Oct. 29 that it is employing a new operating plan for its North American Coal business to aggressively lower costs and drive a drastic improvement in its near-term financial performance.

While Cliffs said it remains committed to the sale of its coal assets, it is taking necessary measures to lower operating and capital costs for the mines. The company will continue to meet its committed customer orders into 2016.

With this decision, the workforce will be reduced by approximately 50% at the two mining operations, the Oak Grove longwall mine in Alabama and the Pinnacle longwall mine in southern West Virginia. Cliffs is notifying the union at both sites and all employees about the new operating plan, staffing implications and how labor will be realigned. This will impact approximately 500 employees. Cliffs daid it will make every effort to support its employees during this transition.

Cliffs is a major producer of iron ore and bought these mines so it could supply this metallurgical coal along with iron ore to steel producers. But these are both old, relatively high-cost operations, and met coal prices haqve slumped lately. U.S. Mine Safety and Health Administration data shows that Oak Grove produced 1.6 million tons in the first nine months of this year and 2.3 million tons in all of 2014. Pinnacle produced 1.8 million tons in the first nine months of this year and 2.7 million tons in all of 2014.

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.