As of December 8, the company said, Highland Mining’s Superior, Reylas, Freeze Fork and Trace Fork surface mines in Logan County will continue to operate, along with the North surface mine in Mingo and Logan counties, Black Castle Mining’s surface mine in Boone County, and Republic Energy’s Republic and Workman Creek surface mines in Raleigh County.
Additional technical and other support services for these mine operations also saw the WARN extension notices expire without a reduction in workforce.
The WARN notices were initially issued on July 31 and included 11 different surface mining operations in West Virginia plus some support operations. Eight of the 11 received WARN extensions on September 26, and two were idled due to sustained weak market conditions and government regulations challenging the Central Appalachian mining industry. One other, Alex Energy’s Edwight mine, continued to operate without extending its WARN notice.
Alpha officials said the longer-term plans for the mines included in the WARN expiration will continue to depend upon market prices and demand.
Alpha Chairman and CEO Kevin Crutchfield credited the operators’ and workers’ efforts to reduce costs to compensate for weak coal prices. “Many of these sites have made significant progress in improving efficiencies and finding cost savings,” he said. “They were proactive in presenting ideas that helped move the mines toward enhanced contributions to earnings before interest, taxes, depreciation and amortization while continuing to operate safely and in an environmentally sound way.”
Alpha President Paul Vining added that sales opportunities have also improved in some locations.
“Though demand for Central Appalachian thermal coal has declined, there is residual demand for the coal these mines produce and we’ve booked enough sales to allow the mines to continue operating,” he said.
At the same time, Vining expressed concern for a changing coal market in which the likelihood for more volatility is increased.
“The market is moving toward a spot market, away from longer-term agreements that coal suppliers and customers have worked with in the past. We’re certainly mindful of the low stockpiles some utilities have on hand and are trying to ensure we are ready to respond should demand increase,” he said, adding that buying coal as it is needed may not be an effective strategy if the U.S. has another cold winter or if demand spikes and the rail system continues to struggle with performance.
Already this year, PJM Interconnection – the regional transmission organization that coordinates wholesale electricity for 13 states (more than 60 million Americans) – set a new record for November demand, breaking the previous record set just last year, according to the Alpha executive.
“Another cold winter could put pressure on utilities’ ability to procure fuel, whether coal or gas, on a prompt basis. The cost efficiencies gained by these Alpha-affiliated operations were important in allowing the mines to continue to produce in a safe, cost-efficient manner and they remain ready to serve the continuing needs of our nation’s coal-fired utility fleet,” Vining said.
