Earlier this year, the U.S. Department of Energy projected that annual Central Appalachian Coal production -- mostly consisting of Southern West Virginia and Eastern Kentucky -- would be cut in half by 2035. And, during the first quarter of 2012, coal's share of U.S. electricity generation dropped to 36 percent, far below the 50 percent still frequently cited by industry supporters.
In Tuesday's announcement, Alpha officials focused on how they believe their "strategic repositioning plan" would "meet the evolving demands of a changing global coal market."
"The focus and shape of our company need to change to reflect our new business environment," said Paul Vining, Alpha's president. "We must have a nimble operating model, superior cost management and an overhead structure that matches our streamlined operational footprint.
"We recognize these changes will impact our people, suppliers and communities in some areas where we operate," Vining said. "Alpha is committed to acting transparently and responsibly throughout the transition with respectful consideration of our people and all other stakeholders."
Despite what it called a "current market softness" for steel-making, or metallurgical coal, Alpha said new mills are being planned or are under construction in developing areas of Asia, South America and elsewhere that provide long-term growth opportunities.
"As the third-largest supplier of metallurgical coal globally, Alpha has 25-30 million tons of export capacity through the East Coast and Gulf of Mexico which is partially untapped, giving Alpha the capability to scale up exports swiftly," the company said.
Regarding steam coal, used to make electricity, Alpha said its focus is on operations with "competitive cost positions" and "more stable customer demand -- such as supplying base-load power plants and generating units that will survive a stricter regulatory regime."
Last year, Alpha produced about 106 million tons of coal, split about evenly between eastern and western mines, according to corporate disclosures. Metallurgical mines, located exclusively in the east, accounted for just 18 percent of Alpha's total production in 2011, but half of the company's revenues, company report show.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.