Alpha idles 1mn st of CAPP coal production

Market: Coal, Emissions
15/07/13

Washington, 15 July (Argus) — Alpha Natural Resources is idling 1mn short tons/yr (907,185 t/yr) of Central Appalachian coking and steam coal production, citing global oversupply and unfavourable prices.

The company reduced production at subsidiary White Buck Coal's underground operations in West Virginia on 12 July. Alpha idled the Pocahontas underground mine in Greenbrier County and one section of the Grassy Creek No. 1 mine in Nicholas County. The mines produce primarily mid-volatile metallurgical coal.

The global market for metallurgical coal is oversupplied, while prices for the mid-volatile specification “have dropped dramatically,” Alpha said.

Alpha will also reduce shifts and make production adjustments at steam and metallurgical coal mines in its Coal River East business unit during the third and fourth quarters, including eliminating Saturday shifts.

The total cuts represent about 1mn st of annualized production.

The Pocahontas mine produced 113,459st in the first quarter and 350,606st in 2012, according to Mine Safety and Health Administration data. Grassy Creek No. 1 produced 66,239st in the first quarter and 290,061st last year.

Last month Alpha idled the Justice No. 1 mine in Boone County, West Virginia, and cut back operations at the Liberty preparation plant near Madison because of weak market conditions.

The mine's output was split equally between thermal coal and low-rank metallurgical coal. Justice produced 103,694st in the first quarter and 752,978st in 2012.

The company raised its 2013 coal sales guidance in early May, seeing an improvement in eastern thermal coal sales. Even with the increase, shipments were only targeted for 83mn-93mn st, down from 2012 sales of 106.3mn st. Last September Alpha initiated a program to cut about 16mn st/yr from its production as part of a shift in focus in the east to higher-margin coking coal output.

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Alpha idles 1mn st of CAPP coal production

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