Arch Coal Inc.'s cutbacks will affect about 30 employee support positions at the company's Cumberland River mining complex in Wise County and Letcher County, Ky., a company spokeswoman said last Friday.
Arch, based in St. Louis, announced plans last week to scale back operations at two complexes in Kentucky and Virginia, a move expected to trim the work force by more than 100. Cumberland River and the Hazard operation in Perry County, Ky. are the two affected complexes.
Link said the curtailed operations will cost about 110 jobs, about 65 of them company positions and the rest contractor jobs not controlled by Arch.
The Cumberland River mining complex includes facilities at Dunbar outside Appalachia and in Letcher County, Ky. and is primarily underground. The Hazard Mining complex is in Perry County, Ky.
Two contract-operated mines in Letcher County are to be idled, affecting about 45 contractors. As a result of the Letcher County mines being idled, about 30 employee support positions at the Cumberland River complex in Letcher and Wise counties will be affected, Link explained.
Cumberland River, part of Arch's Appalachia Region operations, last year sold 1.5 million tons of coal, Link said. The Appalachia Region sold 3.4 million tons, down from 4.2 million tons in 2012's fourth quarter. The average sales price per ton for the first quarter was $74.76, down from $83.50 in 2012's first quarter.
Arch reported a first-quarter net loss of $70 million on April 23. The company's revenues of $826 million for the first quarter of 2013 fell short of the previous year's first quarter on lower sales volumes, Arch reported.
The company sees U.S. coal markets improving this year, with power demand increasing and coal regaining part of the power generation market because of the higher costs of other fuels.
Link says eligible workers who are laid off will be offered severance packages. She says the two complexes still employ nearly 500 workers.
"We regret the need for this action, and appreciate the efforts of those employees whose positions are affected," Link said. "This decision to pare back production and personnel was necessary due to the ongoing coal market challenges."
Bill Bissett, president of the Kentucky Coal Association, noted that there is instability in the metallurgical coal market, although operators are seeing a "little bit of an uptick" in the steam coal market.
Bissett said the industry is not seeing the "precipitous layoffs" it experienced in 2012. Reasons for that are uncertain, possibly including higher natural gas prices, which make central Appalachian coal more competitive; an economic rebound and increased demand for electricity; and industry hopes that the Obama administration will relax what Bissett called its "stringent anti-coal stance" in the president's second term.