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Production, jobs dropped at WV Cliffs mine

A THERMAL coal demand slump has claimed another victim - this time it is Cliffs Natural Resources...

Donna Schmidt
Production, jobs dropped at WV Cliffs mine

The company said it would reduce sales and production from the surface mine in Man, Logan County, from 1.1 million tons to about 800,000 tons whole-year, citing thermal coal’s softer pricing.

The drop will mean the unfortunate cut of 46 hourly positions at the mine along with another 13 salaried positions at its administrative offices.

The layoffs were effective on June 15, though the length of the furloughs was not disclosed.

“Thermal coal usage for power generation has declined sharply, driven by the extremely mild winter and historically low natural gas prices,” Cliffs global coal operations senior vice-president David Webb said.

“Production at Toney Fork will be reduced to a level that will satisfy our existing supply agreements and customer requirements.

“Unfortunately, this decision will affect a number of our employees.”

Cliffs took over ownership of Toney Fork no. 2 in 2010 as part of its acquisition of INR Energy.

The mine’s totals are reported under its financials for the North American coal business segment.

Officials said it was maintaining its projected whole-year sales target for metallurgical coal sales from the segment of 6Mt of sales and 5.5Mt of production.

The company reported a bumper start to the year with a 7% jump in revenue to $US1.3 billion.

It was the North American coal segment which drove the producer’s first-quarter numbers delivered in April.

At the time, Cliffs chairman Joseph Carrabba said the increase in profits was from higher sales volumes across its reporting segments and reiterated Cliffs’ dedication to maximizing the operational effectiveness of all of its mines.

“Our ability to increase sales volumes across all business segments is the direct result of continued execution of the organic growth projects acquired over recent years,” he said.

“We recognize that at times, this growth presents challenges, however, we are committed to optimizing all of our operations, both new and old, to deliver increased production reliability and scale.”

However, at the same time, it decreased its 2012 North American coal revenues per ton expectation to approximately $130-135 from its previous expectation of $140-150.

The decrease, officials said, was due to lower spot-market pricing for metallurgical coal products.

Cliffs owns six coal mines located in West Virginia and Alabama, both thermal and metallurgical.

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