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11/22/2024 07:07:35 am

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Alpha Natural Resources to Lay Off 1,100 Workers in October

Coal is excavated at the Jim Bridger Mine

(Photo : REUTERS/Jim Urquhart) West Virginia mined 120 million tons (109 metric tons) of coal in 2012, second to Wyoming, or about 12 percent of total U.S. production according to the National Mining Association.

Alpha Natural Resources announced on Thursday that it might lay-off 1,100 workers from its 11 coal mines by October.

The Virginia-based company said it already warned its employees about their impending termination and have given them layoff notices.

The layoffs is caused by the weak economy, poor market conditions and government rules that have challenged the entire Central Appalachian mining industry, the company said.

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The changes in the mining industry and the shift in the business environment are other reasons for the layoffs, according to Alpha.

In a statement released by Alpha on Thursday, it said that the company's action was instigated by the constant weak demand of coal in the U.S. and in countries abroad. Coal also has minimal price levels and the government have regulations that leads to closing coal-fired plants and stop the construction of new ones, the statement said.

There is an excessive supply of coal all around the world, the company said. Due to the excess, the prices of coal have been depressed, "prices for metallurgical coal used to make steel have declined more than 20 percent in less than a year, reflective of oversupplied markets."

Virginia Rep. Earl Ray Tomblin said the news of the expected layoffs is disheartening and the order to close mines is very unfortunate especially for the miners, their families and the community,as a whole.

Paul Vining, president of Alpha, said they will continue to run their business as usual and will be making forecasts based on the company's sales and the pricing trend of coal in the market. After all the information have been considered, the company executives will then decide how the business will be secured.

The mines affected by the layoff notice were able to produce a total of 4.2 million tons of coal that were used in power plants and steelmaking, according to Alpha. However, due to the future layoffs, the number is expected to decrease drastically.

"Altogether we've idled about 35 million tons of coal production in just three years, primarily operations with the highest cash costs," Vining said.

Alpha is not the only company that is affected by the coal industry crisis. Patriot Coal laid off 75 employees in June after its April layoff notice.

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