Thursday, July 31, 2014
CHARLESTON, W.Va. (AP) — One of the nation's largest coal producers said Thursday it expects to lay off 1,100 workers at 11 southern West Virginia surface coal mines by mid-October, citing dismal markets and federal regulation.
The announcement by Alpha Natural Resources dealt another blow to Appalachia's iconic, but dwindling, fossil fuel industry. The company said 2015 industry forecasts show Central Appalachian coal production will be less than half of its 2009 output.
It's due to a combination of familiar factors, Alpha said: competition from cheaper natural gas, weak domestic and international markets and low coal prices. Prices of coal sent to Europe for power are at a four-year low, and prices for steel-producing coal have dipped more than 20 percent in less than a year, Alpha said.
Another driving factor is that Appalachian coal just isn't as accessible anymore. Thick, easy-to-reach seams have been largely picked clean.
"Many mines in the region have done a great job finding ways to reduce costs and remain economically viable in this unprecedented business climate," said Alpha President Paul Vining, "but some Central Appalachia mines haven't been able to keep up with the fast pace at which coal demand has eroded and prices have fallen."
Alpha also laid some blame on the U.S. Environmental Protection Agency, which is pushing to limit carbon emissions from coal-fired power plants, part of President Barack Obama's plan to stem global warming. The plan has sparked outrage in coal-producing states, and has driven the political conversation in a heated election year.
Gov. Earl Ray Tomblin acknowledged the economic factors at play, but said Thursday's announcement shows West Virginia's fears over the Obama administration's rules have come true.
"We recognize market trends can play a part in these potential closures; however these actions also show the real-world impact of the regulatory environment in which industry must operate," Tomblin said.
Since 2010, coal miner jobs have plummeted. Last year, about 123,300 people worked in mines, compared to 135,500 in 2010, according to the federal Mine Safety and Health Administration.
West Virginia still remains the nation's No. 2 producer, behind Wyoming.
In the past three years, Alpha says it has laid off 4,000 employees and idled 60 mines and 35 million tons of production. The Bristol, Virginia-based company is one of the country's biggest coal suppliers, with additional mines in Virginia, Kentucky, Pennsylvania and Wyoming.
Alpha notified employees Thursday afternoon that it expects to idle mines and related facilities. None of the layoffs would be immediate. Production could continue under the right circumstance, but next year's projections aren't looking good.
"There may be cases where if market pricing improves, and we find alternate customers for the coal either at home or abroad, production could continue," said Alpha spokesman Steve Hawkins.
The mines are in Logan, Mingo, Boone, Raleigh, Kanawha and Fayette counties.
The affected mines produced 4.2 million tons of coal through the first half of this year. About 75 percent of their coal is used for power generation, and 25 percent is metallurgical coal for steel production, Hawkins said.
The federal Worker Adjustment and Retraining Notification, or WARN, Act requires companies to notify employees if large layoffs are possible.