June 21 Arch Coal Inc will cut about a
tenth of its workforce, or 750 jobs, as it closes three
higher-cost mining complexes and associated plants in response
to the weak U.S. market for thermal coal.
Coal producers are suffering because of the vast new supply
of natural gas in North America, which has prompted electricity
producers to switch off many older coal-fired power plants.
Apart from the three closures, Arch will also temporarily
idle the H azard/Flint Ridge complex and cut production at other
operations in Kentucky, Virginia and West Virginia. The mine
locations affected by the closures are the East Kentucky,
Eastern and Knott County complexes, the company said.
The St. Louis-based company as of Feb. 15 employed 7,442
full and parttime employees.
"This decision was difficult but necessary in order to
weather the current downturn and to position the company for
long-term success," Chief Executive John Eaves said in a
Arch Coal expects to incur one-time, non-cash write-down
charges of about $425 million this quarter, and $14 million in
severance and related costs between the second and third
The moves will reduce Arch's annual thermal coal production
by more than 3 million tons, though it still expects thermal
coal sales of 128 million to 134 million tons this year.
The cutbacks will mean a reduction in annual capital
expenditures of $30 million to $40 million, after investing $571
million in 2011.