American coal miner announces mine closure
Alliance Resource Partners (NASDAQ: ARLP) announced on Friday that it will shut down its Pontiki coal mine in response to weak demand.
The Kentucky mine employs 142 people. All employees were issued Worker Adjustment and Retraining Notification (WARN) Act notices.
Operations will wind down in December as the company works to fulfill existing sales contracts.
In 2012 the the Mine Safety and Health Administration temporarily closed the Pontiki mine. Operations resumed several months later but due to the idling period the company recorded a $26.6 million loss in the 2012 financial year.
"When Pontiki resumed production last year, we knew the market outlook was uncertain but were hopeful that conditions would improve," the company's CEO, Joseph W. Craft III, said in a statement."Unfortunately, market conditions remain weak, and we have been unable to secure new coal sales commitments for Pontiki coal beyond the existing 2013 contracts."
Craft noted that the company was "deeply saddened" by its decision but says they had "no choice."
ARLP has 16 operations, stretching from Illinois to Pennsylvania. The firm says it is "evaluating options" to find positions for Pontiki employees at its other projects.
The miner says it does not expect the closure to have a material impact on its 2013 financial results.
Pontiki Coal is a wholly-owned subsidiary of ARLP. Year-to-date the site has produced 634,000 tonnes of coal.
ARLP lost 2.7% of its share price on Friday, trading at $73.73.