Arch Coal lays off nearly 600 Kentucky miners

jpatton1@herald-leader.comJune 21, 2012 

Exacerbating Eastern Kentucky's unemployment woes, major coal producer Arch Coal announced Thursday that it will lay off nearly 600 Kentucky miners in several counties. Additionally, 150 will be laid off from a mine in West Virginia.

Late Thursday, the St. Louis-based company announced it would idle several operations and reduce production at others in Appalachia "due to the unprecedented downturn for coal-based electricity."

Arch's actions will mean a total job loss of 750 full-time positions, with about 79 percent of the jobs in Kentucky, 19 percent in West Virginia, and the rest in Virginia. Specific figures were not available Thursday, the company said.

Arch's East Kentucky complex, in Pike and Martin counties, will be closed, as will the Knott County/Raven complex. Both employ hundreds.

Smaller operations, such as a mine near Hazard in Perry County that employs 50, also will be closed. Arch will idle, at least temporarily, the Flint Ridge complex in Breathitt County, which employs 150.

"We deeply value our people, and the decision to reduce personnel was made only after exhaustively reviewing other options and exploring opportunities to avoid this measure," John W. Eaves, Arch's president and CEO, said in a statement. "We sincerely regret the impact the announcement will have on our employees and their families as well as on the local communities where we operate."

Gov. Steve Beshear said he had authorized the Education and Workforce Development Cabinet's Rapid Response Teams to help the newly unemployed.

"We are extremely disappointed and disheartened by the announcement from Arch Coal today, as we know the announcement of significant layoffs in Kentucky is devastating news for hundreds of Kentucky families," Beshear said in a statement. "These teams will also ensure the families are aware of assistance available from state and federal services during this difficult time.."

There probably will be a lot of demand for that assistance.

Leslie County Judge-Executive James Sizemore said he received a call Thursday morning from a company representative to tell him about the Flint Ridge mine, which employs a number of people from Leslie County. "There will be a lot affected around here, and all over," Sizemore said.

Bill Bissett, Kentucky Coal Association president, called the layoffs "a serious concern on multiple fronts."

"These are high-paying jobs in a region that desperately needs them. ... The economic impact will go beyond the coal fields to other cities across Kentucky," Bissett said.

Arch cited a "continuing decline in demand for steam coal in the central Appalachian market" for its decision to idle several Kentucky mines effective Aug. 20, The Associated Press reported.

"We regret this action; however, it is a necessary step that we are forced to take in response to a difficult business environment," the company said in notices dated Wednesday that were sent to the state's Office of Employment and Training.

The layoffs at the largest mining operations will occur in stages, the company said. Laid-off employees may apply for vacant positions in Arch, but there are no guarantees.

Arch Coal's share price has been plummeting this year as power companies' demand for coal has slumped in favor of natural gas. Shares (NYSE: ACI) closed Thursday at $6.20, down 20 cents, or 3.1 percent. The stock's 52-week high was $28.76 in July.

"The U.S. coal industry is in the midst of a restructuring that will cause some players to exit the market and others, like Arch, to pare back operations until market conditions improve," Eaves said in a release May 1 as the company reported a quarterly loss and cut dividends.

Kentucky lawmakers said the state has braced for this for some time.

"As unfortunate as this news is, it cannot be said that it was wholly unexpected," Beshear said. "Demand for coal is at a 20-year low, thanks to a rapidly shifting energy market and high inventory. Unpredictable federal regulation processes have also hindered legal mining efforts, and we will continue to fight the unfair regulatory changes that effectively delay or halt our mining projects."

House Speaker Greg Stumbo said recovery would be slow.

"It's a fragile economy at best, and any disruption of this proportion is going to mean hardship," said Stumbo, D-Prestonsburg.

"A lot of us at the state and federal level have been crying about the war on coal. Obviously, it's here, and it's affecting Kentucky families," he said. "It's not just those jobs — it's the ancillary industries, the coal truck drivers, those people who sell diesel fuel, those businesses that rely on payroll."

Stumbo's counterpart on the minority side of the state House also decried the job losses.

"Today's reported announcement is yet another example of the overreaching policies on the federal level by the Environmental Protection Agency, and the Democrats' continuing 'war on cCoal' led by their leader, President Obama," said state Rep. Jeff Hoover, R-Jamestown. "This 'war on coal' by Democrats continues to hit those who least can afford it: those families who depend on the coal industry for their income. This also further cripples the business community in that they will see their bottom lines impacted greatly due to the increased utility costs."

This is the second major work-force reduction for coal companies in Kentucky this month, according to published reports. On June 8, Alpha Natural Resources announced it would cut 436 jobs in Kentucky but give 286 of those workers the opportunity to relocate to open positions in Kentucky, West Virginia and Virginia, for a net loss of 150.

State Sen. Brandon Smith, R-Hazard, said he has heard that coal-related layoffs could top 2,200 by the end of summer, and he predicted rolling brownouts as Kentucky and the nation become energy-poor.

"People are extremely worried. There's a threat over all the mines," Smith said. "It's not just the jobs lost; it's the impact on utilities and on energy costs."

With record summer temperatures predicted, "a lot of elderly people are going to pay for failed energy policies," said Smith, who chairs the Senate Natural Resources and Energy Committee. "I directly attribute this to the Obama administration and the EPA. This lays at his feet."

On its Web site, Arch Coal calls itself "a top-five global coal producer and marketer." It has more than 20 mining complexes in Kentucky, Wyoming, Utah, Colorado, Illinois, West Virginia, Virginia and Maryland.

The Associated Press contributed to this report. Janet Patton: (859) 231-3264. Twitter: janetpattonhl.

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