TORONTO (miningweekly.com) – Coal miner James River Coal on Thursday announced that it had decided to idle four more of its Central Appalachian coal mines, as continued weak coal prices haemorrhaged the company’s third-quarter results.
The Richmond, Virginia-based company on Wednesday idled two underground and two surface mines at its Buckeye complex, and furloughed about 200 employees and contractors. The company stated that it expected the complex, which produced one-million tons in the first nine months of the year, to restart in 2014 depending on market conditions.
James River last month idled coal production at its McCoy Elkhorn operations, Bledsoe coal operations and Long Branch surface operations, owing to the continued weakness in the coal market. The company, at that time, furloughed about 525 employees and issued the majority of them with Worker Adjustment and Retraining Notification Act notices, owing to it being unable to determine a date for reopening the operations.
As a result of this, James River, which also has mines in southern West Virginia and southern Indiana, expected to pay about $5.8-million in severance-related costs during the fourth quarter.
“We are hopeful that these idlings can be reversed in the first half of 2014. The coal markets have stabilised during the past several weeks. Prices are still very low, but they are finally moving in a better direction,” chairperson and CEO Peter Socha said.
The company reported a net loss of $25.5-million, or $0.73 a share, compared with a net loss of $20.6-million, or $0.59 a share, a year earlier.
Revenues declined 48% year-on-year to $143.34-million, down from $264.63-million a year earlier.
Shipments in the period fell 34% to 2.1-million tons and coal prices declined by about 18% to $68.68/t.
Thermal coal prices had been under increasing pressure as electricity companies switched to burning cheaper natural gas to generate electricity and weak steel demand, compounded by a supply glut, had weighed on metallurgical coal prices.
Coal miners had also been impacted on by stricter emissions rules on coal-fired power plants in the US.
Rival coal miners Alpha Natural Resources, Arch Coal and Consol Energy had also reported third-quarter losses.