Murray Energy Confirms Layoffs

By John W. Miller and Timothy Puko 

Coal miner Murray Energy Corp. on Friday said it would lay off as many as 1,829 workers at mines in Illinois, Ohio and West Virginia.

The shedding of over 20% of the workforce at the nation's third biggest coal miner deals another harsh blow to the industry that is still central to the Appalachian economy.

The St. Clairsville, Ohio-based company blamed increased use of natural gas, taxes and what it called "the continuing destruction of the United States coal industry by President Barack Obama."

The planned layoffs were first reported Thursday by The Wall Street Journal.

Robert Murray, the 75-year-old founder and chief executive of the company, made the decision Wednesday after a 12-hour meeting with operations managers, according to the person familiar with the matter. The company decided to make much bigger cuts than it had previously been considering because of growing concerns about the slumping market for thermal coal, the person said.

The company said it expects the job cuts to reduce its coal production by 3 million to 4 million tons--about 5% to 6% of production capacity--in 2015.

Earlier Friday, rival miner Alpha Natural Resources Inc. Friday said it was planning to lay off 439 miners at a mine in south-central West Virginia.

Those layoffs will affect workers at the Camp Creek underground coal mine and processing plant in Camp Creek, WV. In addition, Alpha said it had cut its workforce at three other Alpha-affiliated mines in Kentucky and Virginia, affecting 71 workers.

Alpha Chairman and Chief Executive Kevin Crutchfield called current market conditions "an unprecedented time in the coal industry". His company, he said, was aiming to "build a smaller but more sustainable portfolio of mining assets across our region footprint."

There has been little in the way of good news for U.S. coal miners. Last week, West Virginia-based Patriot Coal Corp. returned to bankruptcy court only 18 months after emerging from chapter 11 protection, because of "challenging market conditions." Others, like Arch Coal Inc., have suffered debt downgrades.

Coal prices have fallen over 15% in the past year, and are stuck below those natural gas, suddenly plentiful and inexpensive thanks to shale drilling. Coal's problems have been compounded by new environmental rules, which have led utilities to phase out coal as a source of power. In 2015, power companies are expected to retire substantial coal-fired generation capacity from the grid, the Energy Information Administration says.

"These are hard decision because they affect good people," Keith Hainer, Alpha's executive vice president of mining operations, said of the layoffs.

The region is ill-prepared for what is next, say economists. "We've had a lot of economic growth, but not development" for the future, says Ted Boettner, executive director of West Virginia Center on Budget & Policy, a think tank. "We're in a tough position."

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