Due to oversupplied and weak coal markets, Alliance Resource Partners L.P. (ARLP) intends to cut production at its higher-cost mines so it can concentrate on maximising production at its lower-cost mines.
"Unfortunately, prolonged weak market conditions made this production response necessary," stated Joseph W. Craft III, President and CEO. "We deeply regret the impact of these decisions on our employees, their families and their communities. While we were hopeful that conditions would improve, an oversupplied market combined with weak pricing forced us to take these actions and shift production to our lowest-cost mines. These steps are consistent with our current projected production and sales volumes for 2015 and beyond."
On 30 October, ARLP's subsidiary, Hopkins County Coal LLC, reduced production from three units to two units at its Elk Creek mine – production will cease at this mine in 1Q16. This action did not result in any job loss as a result of employment opportunities at other ARLP operations.
The Elk Creek mine has generated 2015 year-to-date coal sales and production volumes of approximately 2 537 000 short t and 2 648 000 short t, respectively.
On 6 November 2015, ARLP's subsidiary, Gibson County Coal LLC, issued Worker Adjustment and Retraining Notification (WARN) Act notices to approximately 120 of its employees in expectation of removing a total of one and a half production units at its Gibson North and Gibson South mines. ARLP currently anticipates production at the Gibson South mine to be increased to four production units with the Gibson North mine idled by 31 December 2015.
Gibson North has generated 2015 year-to-date coal sales and production volumes of approximately 1 939 000 short t and 1 983 000 short t, respectively.
Also on 6 November 2015, ARLP's subsidiary, Sebree Mining LLC, issued WARN Act notices to all employees at the Onton mine, and stopped coal production at the mine. This reduction is expected to affect approximately 140 employees.
The Onton No. 9 mine has generated 2015 year-to-date coal sales and production volumes of approximately 1 861 000 short t and 1 869 000 short t, respectively.
ARLP has indicated that some of the coal production cuts at Onton, Gibson North, and Elk Creek will be replaced by increased production at ARLP’s lower-cost mines.
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/09112015/alliance-resource-partners-cutting-coal-production-3129/