By John W. Miller and Timothy Puko
Coal miner Murray Energy Corp. on Friday said it would lay off
as many as 1,829 workers at mines in Illinois, Ohio and West
Virginia.
The shedding of over 20% of the workforce at the nation's third
biggest coal miner deals another harsh blow to the industry that is
still central to the Appalachian economy.
The St. Clairsville, Ohio-based company blamed increased use of
natural gas, taxes and what it called "the continuing destruction
of the United States coal industry by President Barack Obama."
The planned layoffs were first reported Thursday by The Wall
Street Journal.
Robert Murray, the 75-year-old founder and chief executive of
the company, made the decision Wednesday after a 12-hour meeting
with operations managers, according to the person familiar with the
matter. The company decided to make much bigger cuts than it had
previously been considering because of growing concerns about the
slumping market for thermal coal, the person said.
The company said it expects the job cuts to reduce its coal
production by 3 million to 4 million tons--about 5% to 6% of
production capacity--in 2015.
Earlier Friday, rival miner Alpha Natural Resources Inc. Friday
said it was planning to lay off 439 miners at a mine in
south-central West Virginia.
Those layoffs will affect workers at the Camp Creek underground
coal mine and processing plant in Camp Creek, WV. In addition,
Alpha said it had cut its workforce at three other Alpha-affiliated
mines in Kentucky and Virginia, affecting 71 workers.
Alpha Chairman and Chief Executive Kevin Crutchfield called
current market conditions "an unprecedented time in the coal
industry". His company, he said, was aiming to "build a smaller but
more sustainable portfolio of mining assets across our region
footprint."
There has been little in the way of good news for U.S. coal
miners. Last week, West Virginia-based Patriot Coal Corp. returned
to bankruptcy court only 18 months after emerging from chapter 11
protection, because of "challenging market conditions." Others,
like Arch Coal Inc., have suffered debt downgrades.
Coal prices have fallen over 15% in the past year, and are stuck
below those natural gas, suddenly plentiful and inexpensive thanks
to shale drilling. Coal's problems have been compounded by new
environmental rules, which have led utilities to phase out coal as
a source of power. In 2015, power companies are expected to retire
substantial coal-fired generation capacity from the grid, the
Energy Information Administration says.
"These are hard decision because they affect good people," Keith
Hainer, Alpha's executive vice president of mining operations, said
of the layoffs.
The region is ill-prepared for what is next, say economists.
"We've had a lot of economic growth, but not development" for the
future, says Ted Boettner, executive director of West Virginia
Center on Budget & Policy, a think tank. "We're in a tough
position."
Write to John W. Miller at john.miller@wsj.com
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