February 3, 2012 / 10:30 PM / 8 years ago

UPDATE 1-Alpha Natural to idle coal mines on weak demand

Feb 3 (Reuters) - Coal producer Alpha Natural Resources Inc said it will idle four mines immediately and two others by early 2013, joining Patriot Coal Corp in cutting production as power-producing customers switch to cheaper natural gas.

A total of 10 mining operations will be affected, four in eastern Kentucky and six in southern West Virginia, Alpha said in a statement on Friday.

This is expected to reduce annual coal production by about 4.0 million tons, including about 2.5 million tons of thermal coal and 1.5 million tons of lower quality, high-volatility metallurgical coal.

The company’s production capacity is more than 120 million tons a year.

Alpha, which employs about 14,000 people, said nearly 320 employees at affiliated mining companies will be displaced within the next few weeks.

“Several mines are encountering weak demand for their products. We examined all options but in the end these operations had to do what was necessary to preserve a sustainable business plan in a challenging environment,” Alpha Chief Executive Kevin Crutchfield said.

Power-producers such as FirstEnergy Corp, American Electric Power and Duke Energy are shutting down many of their coal-fired plants in response to stricter environmental rules.

Clean-burning natural gas, whose prices had recently plunged to their cheapest relative to coal since 2009, is fast emerging as a replacement to coal for power generation.

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