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Arch Coal to cut 750 jobs

CHARLESTON, W.Va. - Arch Coal announced it is idling several operations and reducing production at others. The company said these and other recent changes will result in a total workforce reduction of about 750 full-time employees.

About 122 of the job cuts announced Thursday are in West Virginia.

The company said it will be curtailing operations at its Eastern complex near Cowen as it works to reduce its steam coal mining capacity.

Arch eliminated about 25 other positions in West Virginia in recent weeks, bringing the total cuts in the state to almost 150 of the 750 that were announced.

The company said it was making the cutbacks "due to the unprecedented downturn in demand for coal-based electricity."

"It's very disappointing and very concerning," said Bill Raney, president of the West Virginia Coal Association. "It's just somewhat emblematic of the turmoil in the market today, at least as it relates to steam coal."

John Eaves, Arch's president and chief executive officer, said in a prepared statement, "We deeply value our people, and the decision to reduce personnel was made only after exhaustively reviewing other options and exploring opportunities to avoid this measure.

"We sincerely regret the impact this announcement will have on our employees and their families as well as on the local communities where we operate," Eaves said. "This decision was difficult but necessary in order to weather the current downturn and to position the company for long-term success."

Eaves said the company's strategic portfolio review is ongoing and may result in the future divestiture of some of Arch's non-core assets or reserves. "The continued aggressive steps we're taking to optimize our portfolio will allow us to better manage through the current business cycle and to prosper in the inevitable market rebound," he said.

St. Louis-based Arch has 24 active mining complexes, including more than a half-dozen in West Virginia.

Arch's announcement is not the first cutback by Appalachian coal producers this month.

On June 11, Alpha Natural Resources Inc. said it would halt mining at four mines and idle two coal preparation plants in Kentucky's Pike and Martin counties. Alpha also said production would be scaled back at several other Kentucky mines and four contract mines would close.

The cutbacks announced by Alpha affected 436 employees. Of that total, 286 are being offered positions at other Alpha operations in Kentucky, southern West Virginia and Virginia while about 150 jobs will be lost.

The mining cutbacks are being made as the industry responds to a surplus of coal intended for power generation.

That surplus was driven in part by slack winter power demand caused by mild temperatures over the winter months.

Utilities are also switching to low-priced natural gas to make up a greater percentage of their overall power generation.

That, combined with what coal officials say is an uncertain regulatory environment caused by the U.S. Environmental Protection Agency, is a driving force behind the recent job cuts.

"You tie all that together and you have a perfect storm on your hands," Raney said.

The EPA has been rolling out new regulations designed to eliminate toxic air pollutants and reduce carbon dioxide emissions in an effort to combat global warming.

Coal supporters have criticized the EPA's tactics as going too far and too fast.

But leaders like U.S. Senator Jay Rockefeller, D-W.Va., insist the coal industry needs to get on board with the changes.

In a Senate floor speech Wednesday, Rockefeller called for industry officials to stop using "scare tactics" to stir up fear and opposition to the changes.

Raney said the new layoff announcement showed industry claims were not so farfetched.

"Here it is -- it's realistic, it's happening and it's happening to these individuals who are getting laid off, and that's the disappointing thing about this," he said.

Rep. Shelley Moore Capito said the layoffs are evidence that the EPA and President Barack Obama's administration need to roll back some of their proposals.

"What is it going to take for the administration and the EPA to back off?" Capito said. "The administration cannot simultaneously claim they're focused on creating jobs while pushing energy policies that are shuttering plants and destroying jobs. It just doesn't pass the smell test."

Writer Jared Hunt contributed to this report.


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