Three MSHA district offices will participate in the pilot: Coal District 2 in Mt. Pleasant, Pa.; Coal District 6 in Pikeville, Ky.; and Metal/Nonmetal Southeast District in Birmingham, Ala. These three locations were selected so pilot efforts could include a wide range of mine operators and different MSHA personnel to determine what will work and if the goals of the program can realistically be met. The pilot began August 31.
Currently, there are approximately 89,000 violations in contest. Congress recently appropriated $18.2 million to the Labor Department and $3.8 million to the Federal Mine Safety and Health Review Commission for the purpose of reducing the existing backlog of cases.
Walter Energy Modifies Production Outlook
Walter Energy is modifying its full-year 2010 coking coal sales expectations. The company now expects to sell between 7.2 and 7.5 million tons for the full-year 2010, compared to a previously expected range of between 7.7 and 7.9 million tons, primarily driven by lower expected coking coal production volumes.
“Since moving to a new longwall panel at Mine No. 4 early in the quarter, we have experienced, and continue to see difficult mining conditions in the panel, significantly slowing down longwall production,” said Joe Leonard, interim CEO, Walter Energy. “These conditions have contributed to a production shortfall of approximately 200,000 tons through August. However, based on section development work further in the panel, we expect production to improve, but not enough for us to maintain previously expected production volumes.
“Continuous miner production in the second longwall panel of our Mine No. 7 East expansion has improved over the last several weeks compared to the advance rates we saw in the second quarter,” Leonard said. “If these rates continue, production in the new longwall panel could start earlier in December than previously expected, increasing coking coal inventory available for sale in early 2011.”
Coking coal production volumes are now expected to total approximately 1.8 million tons in the third quarter at a cost of approximately $60/ton. The company is maintaining coking coal sales volume expectations of 1.8 to 2 million tons for the quarter. However, the higher cost per ton is expected to lead to lower operating income margins, with operating income now expected to average between $107 and $110 per ton, compared to the previously expected range of $110 – $115 per ton.
