Alpha Natural Resources (NYSE: ANR) has announced plans to idle eight coal mines and lay off 800 employees. According to the company, the mine idlings and production curtailments will reduce annual coal output approximately 16 million tons by early 2013.
The decision is part of a larger restructuring plan announced Sept. 18 in which more than 9 percent of the company’s jobs, or about 1,200 positions, will be eliminated through early 2013.
Alpha has not yet said which mines are to be idled.
Alpha says that its rationalization efforts focus on thermal coal operations that have a cost, customer or transportation advantage. Approximately 40 percent of Alpha’s operations reduction will come from higher-cost thermal coal operations in the Eastern U.S. that are unlikely to be competitive for the foreseeable future, the company said. And approximately half of the reduction will come from production curtailments in the Powder River Basin in order to match currently committed sales volumes.
Overhead cost savings from the streamlining of field and corporate support functions are now targeted to be approximately $150 million, which includes the $50 million to $60 million of cost reductions the company announced on June 8, Alpha said.
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