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Wyoming County coal mine may be idled

By Ken Ward Jr., Staff writer

Cliffs Natural Resources said Wednesday that it may temporarily idle its Pinnacle Mine, a major steel-making coal operation that employs nearly 400 people in Wyoming County.

In a filing with the U.S. Securities and Exchange Commission, Cleveland-based Cliffs cited “current poor market conditions for metallurgical coal” as the reason for its action. Cliffs said it had issued the required 60-day notice to workers, local officials and the United Mine Workers, which represents hourly employees at the underground mine.

“If market conditions do not improve, it is expected that the idling of the Pinnacle mine could last more than six months beginning on or about August 25, 2014,” the company said.

Ryan Thorn, a spokesman for Cliffs, said that the company had taken steps to improve “operational and cost performance” at the mine in response to “deteriorating conditions in the metallurgical coal market.”

“The persistent depressed pricing and oversupply in the met coal market for the past year has put cost pressures on the business which has led to this potential action,” Thorn said. “Cliffs senior leadership team will continue to monitor industry and business conditions over the next two months.”

Thorn added that the company “considers the Pinnacle Mine a world-class operation with a strong and productive workforce of mining professionals.”

Employment at the operation was already down with underground jobs down to 397 in the first quarter of 2014, compared to the 2013 average of 478 underground jobs. The mine produced about 2.8 million tons of coal last year, according to data filed with the U.S. Mine Safety and Health Administration.

UMW spokesman Phil Smith said that company officials met with union representatives Wednesday morning to discuss the potential layoffs, and said that low met-coal prices were the biggest reason for the move. Pinnacle also has a large stockpile of coal on the ground at the mine and has been having trouble getting adequate railroad service to transport that coal, Smith said.

“This could turn around,” Smith said. “We hope that it does.”

The announcement by Cliffs comes amid other major challenges facing the coal industry in Southern West Virginia, where cheap natural gas and depleted coal reserves, along with tougher environmental rules, have prompted significant downsizing among the region’s coal producers. After increasing to more than 24,000 during the first two years of the Obama administration, the number of working miners in West Virginia has dropped by more than 5,000. Figures for the first quarter of 2014 show 19,710 miners working in West Virginia, compared to 24,575 during the same period in 2012, according to the most recent data filed by companies with the U.S. Mine Safety and Health Administration.

At the same time, Cliffs has been moving to cut expenses in response to activist hedge fund investor Casablanca Capital, which wants the company to split its U.S. and international operations.

Cliffs is an international mining and natural resources company that produces iron ore and steel-making coal.

In addition to Pinnacle, Cliffs operates non-union underground and surface mines in Logan County that employ more than 500 workers. The company also operates the Oak Grove Mine, a unionized underground operation that employs more than 500 workers in Jefferson County, Ala.

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


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