The company said the surface portions of the Shelby County complex controlled by United Land would remain open, along with its preparation facility and rail loadout.
About 90 contract workers at Kodiak are impacted by the closure.
Walter did not pinpoint the closure date, but did say its pre-tax charge of $US20 million from the idling would be recognised in its fourth quarter. That figure, it noted, will stem from non-cash impairment of Kodiak’s facilities and equipment.
“Despite our best efforts, we simply do not see a positive, long-term outlook for our Kodiak mine," said Walter Industries head George Richmond.
“Closing this mine will allow us to redirect additional miners, assets and attention to our more profitable underground operations."
Walter Industries operates two other Alabama complexes under Jim Walter Resources, including the No. 4 and No. 7 mines.
