Patriot Coal said Wednesday it is considering layoffs at two West Virginia mining complexes that employ about 850 workers.
In a prepared statement, St. Louis-based Patriot said it had warned all employees at its Wells complex near Wharton and its Corridor G operation near Danville of potential layoffs. The 60-day “WARN” notices are required under the federal Worker Adjustment and Retraining Notification Act.
Patriot indicated it had not determined exactly what would happen at either complex, saying that mine management “will be evaluating operations and staffing to assess their ability to produce coal at a cost below projected sales prices.”
“The scope of the anticipated downsizing will be communicated at the conclusion of that process,” the company said in its prepared statement.
Patriot’s announcement comes four months after the company emerged from a bankruptcy reorganization and amid continued troubles for the Central Appalachian coal industry, which faces stiff competition from natural gas and other coal basins, the depletion of many of the region’s easy-to-mine coal seams, and tougher environmental rules.
“These actions are an unfortunate but necessary step to align Patriot’s production with expected sales,” Patriot CEO Ben Hatfield said. “Both metallurgical and thermal coal markets continue to be challenging, with pricing at levels well below production costs at many Central Appalachian mines. Despite the savings we achieved in our reorganization, the production costs of these mines exceed today’s depressed prices, necessitating these actions.”
The Wells complex includes the Black Stallion Mine, the Campbells Creek No. 10 Mine, and the Wells preparation plant. In all, those operations employ 450 people and produced 1.4 million tons of steel-making coal in 2013, Patriot said.
The Black Stallion Mine, acquired as part of Patriot’s December 2012 purchase of Brody Mining, was placed on a “pattern of violations” status in October 2013 after repeated violations cited by the U.S. Mine Safety and Health Administration.
Patriot’s Corridor G complex which includes the Hobet 21 Mine, huge mountaintop removal operation along the Boone-Lincoln county line, and the Beth Station preparation plant The complex employs 397 people and produced 2.3 million tons of thermal coal in 2013. Patriot is already committed to retiring the dragline mining machine at Hobet 21 by the end of 2015, as part of a court settlement in which the company is phasing out the use of large-scale surface mining in Central Appalachia.
Reach Ken Ward Jr. at email@example.com or 304-348-1702.