by Christopher Freeburn | September 18, 2012 10:21 am
Eight mines in Pennsylvania, Virginia and West Virginia run by Alpha Natural Resources (NYSE:ANR) will shut down on Tuesday, part of the company’s plans to reduce its coal production by 16 million tonnes and trim expenses by $150 million by early next year.
While 400 employees will be laid off immediately as the mines are closed, another 800 will ultimately be laid off. It total, almost 9% of the company’s workforce will be laid off by the changes, the Associated Press noted.
Shares of Alpha Natural Resources rose fractionally in Tuesday morning trading.
The mines affected do not use unionized labor, the company said. Both surface mines and deep mines will he closed.
Coal producers like Alpha Natural Resources have come under increased pressure from tightened environmental restrictions and a push for cleaner power sources. They are also being buffetted by falling natural gas prices, which have made it cheaper for power generating plants to switch away from coal.
Company officials said that the mine closures were a step toward dealing with changing conditions in the coal market on a “proactive basis.”
The company will move away from producing coal used for power generation domestically, in favor of coal used in steel manufacturing for export.
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