CHARLESTON, W.Va. -- Touting a plan to "reshape its portfolio of operations," Alpha Natural Resources on Tuesday announced it was immediately closing eight mines in three states, and narrowing its focus to a smaller domestic electrical power plant market and the potential for growth in exporting steel-making coal.
Alpha said its moves are aimed at slashing annual production by about 15 percent, cutting $150 million in overhead and eliminating about 1,200 of the company's 13,100 jobs by early next year.
The Bristol, Va.-based company said the cutbacks would be made by closing some entire mines, idling certain production equipment at other operations, and through "mining out reserves" expected to occur at other sites by early 2013.
Tuesday's mine closures involved 400 employees, but Alpha spokesman Ted Pile said that about 270 of the affected workers would be offered jobs within the company, through a combination of filling vacancies and replacing outside contractors. In West Virginia, the mines affected are the Alloy deep mine near Powellton, the Alloy surface mine near Boomer, the Premium highwall mine near Gilbert and the White Flame surface mine near Wharncliffe, Pile said.
Overall, half of the company's planned production cuts will come from mines in Wyoming's Powder River Basin, 40 percent from eastern steam coal mines "that are unlikely to be competitive for the foreseeable future," and the rest from lower-quality metallurgical mines, Alpha said.
"We're taking a long-term view of the thermal market, and we believe there are solid opportunities for diversified suppliers like Alpha to produce and sell thermal coal profitably into a smaller domestic market and to customers in new markets overseas," Alpha CEO Kevin Crutchfield said in a statement. "At the same time, we have a big opportunity to advance Alpha's position as a premier supplier of metallurgical coal."
The Alpha moves are another blow to the Appalachian coal industry, which is struggling in the face of cheap natural gas, competition from other coal basins, declining reserves of quality coal, and the finalization of long-mandated reductions in toxic air pollution from coal-fired power plants.
While coal company officials and regional politicians have blamed the industry's problems on the Obama administration, the number of miners working in Appalachia actually rose during the first three years of the administration.
But a string of layoffs has come since the first of the year, and coal-mining employment in West Virginia dropped by about 1,300 jobs in the second quarter of the 2012, according to data from the U.S. Mine Safety and Health Administration. MSHA data showed about 23,300 mine workers during the period from April to June, a decline of about 5 percent over the previous three months.