TORONTO (miningweekly.com) – North American coal producer Corsa Coal will trim about one-quarter of its permanent workforce in the Northern Appalachian (NAPP) division, citing the ongoing integration of recently acquired PBS Coals into the NAPP division and weakness in the global metallurgical coal market.

The Toronto-based miner said on Friday that it would cut about 130 full-time positions of the NAPP division workforce, which would result in the Kimberly Run and Barbara mines being idled and placed under management review for closure.

Coal miners across the globe were finding little respite in the current low oil prices, as stubbornly low coal prices, a global supply glut and competition from natural gas had forced cash-strapped miners to idle unprofitable mines and retrench thousands of miners. In the US, increasingly strict environmental legislation was also putting a stranglehold on the coal industry’s growth prospects.

Among the wracked top North American miners were Alpha Natural Resources, Consol Energy, Walter Energy, Arch Coal and Patriot Coal.

Corsa said it would transfer certain personnel and equipment from the idled mines to its Casselman and Quecreek mines, which were the company's lowest-cost metallurgical coal operations. The extra personnel and equipment were expected to boost output and operational efficiency at these operations, while preserving other reserves for future development at a time when the market was stronger.

"We regret the need to take today's actions; however, we anticipate these moves will improve the overall cost structure of the NAPP division while still maintaining premium-quality metallurgical coal specifications.

“The acquisition of PBS last August provided the company with a large portfolio of active and development mines. Today's moves are part of the ongoing integration of PBS, as well as an effort to rationalise production in response to market conditions,” Corsa CEO George Dethlefsen said.

The company expected production and purchased coal volumes of 1.5-million tons to 1.7-million tons of metallurgical coal for the NAPP and 800 000 t to 900 000 t of thermal and industrial coal for the Central Appalachian division this year. It would provide an updated outlook for 2015 when it had finalised sales commitments and production decisions.

Corsa acquired PBS, a subsidiary of OAO Severstal, in August through an all-cash $60-million transaction. Acquiring PBS gave Corsa 13 developed mines, of which three were active and two were preparation plants with access to both the CSX and Norfolk Southern railway.

Corsa was drawn by the proximity of PBS’s low-volatile metallurgical coal assets and infrastructure to Corsa’s existing Pennsylvania operations, which was expected to create synergies and marketing opportunities, positioning it to aggressively grow production and lower costs.