CONSOL Energy expects 2012 production to be reduced by approximately 800,000 tons. To date in 2012, the Fola complex has produced 1.05 million tons of coal. Annual direct estimated economic impact of the Fola complex is $165 million.
CONSOL Energy attributed the idling of its Fola operations to a combination of market conditions and increasing pressure from the Environmental Protection Agency (EPA), which has resulted in both increased costs of surface mining and significant uncertainty for the company’s power generation customers related to the continued use of Central Appalachian coal.
“The decision to idle our Fola operations is a difficult one, but in an effort to manage our inventory and to balance coal production with expected utility demand and shipping schedules, we are faced with making adjustments which unfortunately will impact our workforce,” said Nicholas J. DeIuliis, president. “The domestic market for coal remains soft due to weak economic growth and activity. The warm winter resulted in the growth of our utility customers’ stockpiles and their inability to accept committed coal shipments. Additionally, the escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry.”
In the interim period between today and when the layoff takes effect, underground operations will continue, however, Fola surface employees will be reassigned from mining to reclamation work. The only coal to be mined on the surface will be coal incidental to reclamation. Following the initial 60-day period, mining will be idled at the underground operations. Reclamation will begin in areas not necessary to future operations and an undetermined number of employees will be retained to assist in those efforts.
In related news, the company announced it will extend the annual miners’ vacation period at its Blacksville No. 2 and Robinson Run longwall mines in Northern West Virginia. The company estimates that this action will result in 300,000 tons of deferred production.
The Blacksville No. 2 mine vacation period will be extended for two weeks. CONSOL Energy will conduct two belt rehabilitation projects during that time. The Robinson Run extension will be one week and during that time the company will be working to maintain the mine in ready state. To date in 2012, the Blacksville No. 2 mine has produced 1.27 million tons of coal using a single longwall and three continuous mining units. The Robinson Run mine has produced 2.4 million tons.