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Arch Coal announces 750 more mining layoffs

CHARLESTON, W.Va. -- Arch Coal Inc. on Thursday announced more production cuts and layoffs in West Virginia, Kentucky and Virginia, in another sign of the mining industry's decline across the Appalachian coalfields.

The St. Louis-based coal giant said Thursday's actions "along with other recent changes in Appalachia" will result in a total reduction of about 750 jobs.

Overall, the changes announced Thursday are expected to reduce Arch's production of coal for power plants by more than 3 million tons annually.

Arch Coal did not provide a complete breakdown of the job losses, but the sites where production was to be curtailed included the company's Eastern Complex, which lists mines in Webster and Nicholas counties.

The Eastern Complex reported about 160 employees at two surface mines and one underground mine, but the underground mine was listed in non-producing status starting in March, according to federal records.

Arch's announcement is the latest such action by regional coal producers hit hard by a mild winter, the mining-out of the best quality reserves, competition from Wyoming and Illinois, extremely low natural gas prices, and new limits on toxic pollution from coal-fired power plants.

In a prepared statement, Arch Coal cited "the unprecedented downturn in demand for coal-based electricity" as the reason for its moves.

"Current market pressures and a challenging regulatory environment have pushed coal consumption in the United States to a 20-year low," said John W. Eaves, Arch's president and chief executive.

"In response, we had previously streamlined capital spending, idled equipment and reduced shift work," Eaves said. "We now are taking further steps to enhance our competitive cost position in Appalachia, while increasingly shifting our portfolio in the region toward higher-margin metallurgical coal operations."

In May, Arch Coal had said it already reduced its Appalachian workforce by 500 people since the coal market downturn began.

Most of the job losses announced Thursday were expected to be in Kentucky, where operations targeted by cutbacks included the Flint Ridge complex in Perry and Breathitt counties and the Raven complex in Knott County.

Eaves said that a "strategic portfolio review is ongoing" that could "result in the future divestiture of some of Arch's noncore assets or reserves."

"The continued aggressive steps we're taking to optimize our portfolio will allow us to better manage through the current business cycle and to prosper in the inevitable market rebound," Eaves said.

The Arch announcement comes just one day after Sen. Jay Rockefeller, D-W.Va., urged coal industry officials to stop using "scare tactics" in their campaign to stop Obama administration efforts to reduce coal's impacts on the environment, public health and global warming.

Rockefeller voted against a Republican effort to block one of the Obama rules, and said other market pressures are more to blame than tougher environmental rules for coal's downturn.

"The shift to a lower carbon economy is not going away, and it's a disservice -- a terrible disservice -- to coal miners and their families to pretend that it is, to tell them that it is, that everything can be as it was," Rockefeller said. "That can't be. It's over."

Government data actually show that coal jobs were on the rise during the first three years of what industry lobbyists call Obama's "war on coal." But recent layoffs haven't begun to show up in that data.

Coal's share of electricity generation dropped to 36 percent during the first three months of 2012, well below the 50 percent still frequently cited by industry supporters. Expert forecasts call for a continued decline in coal's market share, and for significant drops in Southern West Virginia production over the next decade.

Bill Raney, president of the West Virginia Coal Association, said Thursday he was "extremely disappointed" in Rockefeller and that the industry's public relations campaign is absolutely correct when it argues "Appalachia is just totally under assault" by the Obama administration's U.S. Environmental Protection Agency.

"I don't look at it as scare tactics," Raney said. "I don't think he's talking about our ads. They aren't scare tactics. We've tried our best to be very positive about this thing."

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


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