Another Coal Company Hit Hard, Forced To Layoff Hundreds Of Employees

(REUTERS/Jonathan Ernst)

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Chris White Tech Reporter
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Illinois-based coal company Alliance Coal announced Friday it must layoff 275 employees.

Alliance noted that 75 of its employees will be released from Illinois subsidiaries River View Coal, LLC and White County Coal, LLC, while Hamilton County Coal, LLC announced the temporary layoff of 200 employees.

The reasons for the temporary job terminations are predictable considering the current environment for which coal companies must contend. Alliance cited low natural gas prices, “overreaching regulations” and a glut in coal market as the reason for the layoffs.

Coal employees in Kentucky also got slammed on Friday. Warrior Coal, LLC and Hopkins County Coal, LLC in the Bluegrass State announced some employees will be let go and others will have their employment status re-examined.

“Prolonged weak market conditions made this production response necessary. We deeply regret the impact of these decisions on our employees, their families and their communities,” Heath Lovell, vice president of operations at Alliance Coal, LLC, said in a statement to the press.

Chart shows coal industry in Kentucky has plummeted since 2001. (chart from Bloomberg)

Chart shows coal industry in Kentucky has plummeted since 2001. (Source: Bloomberg)

​Alliance’s decision to jettison workers, and the possible shuttering of Warrior Coal’s Cardinal mine’s comes on the heels of a slew of companies either filing bankruptcy or slimming down production.

Coal companies, as Alliance noted, are getting hounded by President Barack Obama’s coal regulations, a glutted market and an increase in natural gas production.

The Obama administration placed a moratorium on coal production on federal land – the regulations also dictate that coal companies on public land undergo intensive environmental reviews before becoming operable.

The U.S.’ second-largest coal producer, the Missouri-based Arch Coal, filed Chapter 11 bankruptcy earlier this year citing a dwindling demand for coal fuel. Arch filed in hopes of keeping $4.5 billion in debt off its financial accounts.

There has been an influx of coal company bankruptcies over the past two years, including companies such as Alpha Natural Resources Inc., Walter Energy Inc., Patriot Coal Corp. and James River, all of which have rebounded to some degree.

Alpha’s decision to file for bankruptcy last August allowed it to stay afloat in the interim.

Unfortunately for the coal industry, the company has only reduced its output to 44 million tons, a 10 percent drop from the the 60.7 million tons it said it sold in 2015, according to a Bloomberg Intelligence analysis of government data shows.

That slightly reduced amount only contributes to the glut in the coal markets, thus helping to create more coal company downfalls like those seen from Alliance and Arch.

Because of the regulatory morass and all the market fluctuations, coal companies such as Warrior Coal, LLC’s Cardinal mine may never recover. Ultimately, the market will determine whether the mine keeps churning out power, a spokesperson with the company said.

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