Coal news and updates

Rhino Resource Partners idles majority of US Central Appalachia coal operations

Rhino Resource Partners is temporarily idling a majority of its US Central Appalachia coal operations because of the ongoing weakness in the coal markets, the producer said in a statement Tuesday.

The company has sent out WARN notices to a total of 192 workers at its CAPP operations that include three surface mines and one underground mine at the Tug River, Rob Fork, and Deane mining complexes located in eastern Kentucky and West Virginia.

Exactly how many employees that will ultimately be affected will depend on future market conditions for CAPP metallurgical and thermal coal, Rhino said.

"We are taking difficult actions that are necessary due to the persistent weakness in the coal markets," CEO Joe Funk said in the statement. "Demand for Central Appalachia steam coal has fallen to unprecedented levels as utilities choose low-priced natural gas for electricity generation and other coal-fired capacity is shuttered due to governmental regulations. Met coal prices remain at depressed levels due to persistent worldwide oversupply and weak demand from China.

"Future market conditions will determine the duration that our Central Appalachia operations remain idle," Funk said.

Rhino's CAPP mines produced 266,000 st of coal in the first quarter of 2015 compared to 342,000 st in the year-ago period, according to the producer's first-quarter earnings report. The company sold 237,000 st in the quarter, down from 353,000 st the previous year. Total CAPP coal revenues were down 40.8% year over year to $15.2 million from $25.7 million.

In all of 2014, Rhino's four CAPP mines produced 800,000 st of thermal coal and 300,000 st of metallurgical coal.

source: http://www.platts.com