James River Coal Idling Mines, Reducing Production
RICHMOND, Va. (AP/WSAZ) -- A coal company with operations in Kentucky, West Virginia and Indiana announced Thursday it is closing mines and reducing coal production by 3 million tons.
Richmond-based, James River Coal says it has idled five underground mines ( Abner Branch, Mine 16, Mine 6A, Mine 31,and Jellico), two preparation plants (BL1 Plant and Burke, and one load-out facility(Sunny Knot). It also has reduced production at three surface mines (Frasure, Buckeye, and Montgomery Creek).
The company says the moves impact about 400 employees and contractors.
James River mines thermal coal used for power plants and metallurgical coal used to make steel.
"We are adjusting to the changing market conditions throughout our organization. Many of these decisions have been difficult but necessary," CEO Peter Socha said in a news release. "Our mine operations are in better shape today than at any time in the past 10 years."
The company said that its fourth-quarter net loss more than doubled to $76.9 million and revenue fell more than 35 percent to $232.2 million.
Coal producers are being hit by a double whammy of weak demand. Utilities need less coal to produce electricity because of mild weather and lower power generation, while construction overseas has slowed the appetite for coal to make steel.
"The year 2012 will be remembered as one of the most difficult years in the history of the U.S. coal industry," Socha said.
While markets are "showing some marginal improvement" in 2013, Socha said that conditions remain weak.
"We are cautiously optimistic that our changed operating model and improving markets for several of our products will lead to a brighter future in 2013," he said.
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