Patriot Coal Announces Mine Closures
21 Januar 2009 - 10:54PM
PR Newswire (US)
ST. LOUIS, Jan. 21 /PRNewswire-FirstCall/ -- Patriot Coal
Corporation (NYSE:PCX) today announced a broad initiative to
reconfigure certain of its Central Appalachian mining complexes. As
a follow-on to the earlier idling of the Jupiter complex, and based
on a comprehensive review of its mining operations, the Company
intends to idle its Remington complex and Black Oak mine, and
reduce activity at the Rocklick preparation facility. In reviewing
its current mining operations, reserves, and potential organic
growth opportunities, the Company has made cost per ton the key
focal point in its decision-making. Achieving an improved cost
structure is essential to realizing the Company's full potential,
both now and when market conditions improve. In some cases, this
has led to the idling of mature mining complexes, while continuing
to develop properties with more favorable mining conditions in
order to better utilize the Company's resources, including capital
and personnel. The Remington complex produced 1.0 million tons of
thermal coal in 2008 at one surface and two underground mines.
Lower mining recovery at this complex resulted in a higher cost
structure, as compared to others in the Patriot portfolio. In
today's softer market conditions, continuing these operations was
not considered economically feasible. The Black Oak mine is a
follow-on operation to replace metallurgical production from the
Harris mine, which is reaching the end of its mine life. With
current weak demand in the metallurgical market, the Company has
decided to suspend this operation until the market improves. The
Company had expected to produce approximately 0.9 million tons at
the Black Oak mine in 2009. In conjunction with the idling of the
Black Oak mine, the Company will also reduce manpower and operating
time at its Rocklick preparation plant. In connection with the
idling of these facilities, the Company gave notice today, in
compliance with the Worker Adjustment and Retraining Notification
("WARN") Act. Approximately 400 positions are expected to be
eliminated as a result of these actions. Concurrently, as the
Company continues to optimize its operations and reserves,
development continues on projects already underway, including Blue
Creek and Hill Fork. These projects are designed to provide
flexibility for the Company to increase production as market
conditions warrant. The Blue Creek complex, including two
underground mines in Kanawha County, West Virginia, will have
ultimate annual production capacity of up to 1.8 million tons of
thermal coal, and mining will commence as early as April 2009. This
complex includes an extensive reserve base of 80 million tons, has
favorable seam thickness and clean tons per foot of advance, and is
anticipated to be a low-cost source. The Hill Fork surface mine in
Boone County, West Virginia, is expected to ultimately produce up
to 0.8 million tons of thermal coal annually, with output
commencing as early as February 2009. The Company has already
secured all necessary permits. As a surface mine which can feed
into existing infrastructure, Hill Fork is designed to produce coal
with a very competitive cost structure. "With the addition of the
Magnum properties, we continue to strategically identify
lower-cost, higher-recovery and more predictable mining
opportunities, as we pursue the transformation of Patriot into a
more competitive long-term coal supplier. By idling higher-cost
facilities, while continuing to ramp up lower-cost operations,
Patriot will be well-positioned with a broad platform of mining
complexes competitive under current market conditions and
positioned to thrive as markets rebound," said Patriot Chief
Executive Officer Richard M. Whiting. "Long-term fundamentals in
the coal markets remain solid, and these actions position Patriot
as a stronger competitor. We appreciate the contributions of our
experienced workforce at the facilities being idled, and are
optimistic that we will be able to offer some of these employees
opportunities at our continuing operations." About Patriot Coal
Patriot Coal Corporation is the third largest producer and marketer
of coal in the eastern United States, with 16 mining complexes in
Appalachia and the Illinois Basin. The Company ships to domestic
and international electric utilities, industrial users and
metallurgical coal customers, and controls approximately 1.9
billion tons of proven and probable coal reserves. The Company's
common stock trades on the New York Stock Exchange under the symbol
PCX. Forward Looking Statements Certain statements in this press
release are forward-looking as defined in the Private Securities
Litigation Reform Act of 1995. These statements involve certain
risks and uncertainties that may be beyond our control and may
cause our actual future results to differ materially from
expectations. We do not undertake to update our forward-looking
statements. Factors that could affect our results include, but are
not limited to: changes in laws or regulations; changes in general
economic conditions, including coal, power, and steel market
conditions; the outcome of commercial negotiations involving sales
contracts or other transactions; the Company's dependence on coal
supply agreements with Peabody Energy Corporation in the near
future; geologic, equipment and operational risks associated with
mining; supplier and contract miner performance and the
availability and cost of key equipment and commodities; the
Company's ability to replace coal reserves; labor availability and
relations; availability and costs of transportation; weather
patterns affecting energy demand; ability to obtain mining permits;
legislative and regulatory developments; risks associated with
environmental laws and compliance; the outcome of pending or future
litigation; and the availability and costs of competing energy
resources. The Company undertakes no obligation (and expressly
disclaims any such obligation) to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. For additional information concerning
factors that could cause actual results to materially differ from
those projected herein, please refer to the Company's Form 10-K,
10-Q, S-4 and 8-K reports. DATASOURCE: Patriot Coal Corporation
CONTACT: Janine Orf, +1-314-275-3680, for Patriot Coal Corporation
Web Site: http://www.patriotcoal.com/
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