Bluefield Daily Telegraph
The soft domestic market for thermal coal in the U.S. has forced another regional coal company to idle coal mining operations in West Virginia, Kentucky and Indiana and to reduce its coal production by 3 million tons, according to a James River Coal Co., press release on PRNewswire.
On Thursday, James River announced that it had a net loss of $138.9 million for the year that ended Dec. 31, 2012 and a net loss of $76.9 million for the fourth quarter of 2012. This marks the second year that James River has reported serious losses although the losses in 2011 were not as severe, according to the press release.
“The year 2012 will be remembered as one of the most difficult years in the history of the U.S. coal industry,” Peter T. Socha, chairman and chief executive officer of James River Coal was quoted in the press release as stating. “The domestic thermal coal market went through a third consecutive year of soft market conditions due to weak economic conditions and competitive pressures from natural gas production. The met coal market collapsed during the middle of the year due to weak international markets in both Asia and Europe.
“As we look ahead to 2013, both of these markets are showing some marginal improvement,” Socha stated. “The thermal market, although still weak, is starting to improve due primarily to reduced production by the coal industry and slightly better weather conditions. The met market is seeing clear signs of increased demand from Asia.”
Still, Socha expressed optimism that the adjustments James River have strengthened the company. “Our mine operations are in better shape today than at any time in the past 10 years,” he stated. “We are beginning to see the positive results from the changes, and we are cautiously optimistic that our changed operating model and improving markets for several of our products will lead to a brighter future in 2013.”
Rick Taylor, president of the Pocahontas Coal Association agreed that there is room for guarded optimism in the coal industry, but added that developments at James River show that the coal industry isn’t out of the woods yet.
“This is a sign that we continue to face challenges in the coal industry in both the thermal and metallurgical sides of the business,” Taylor said.
— Contact Bill Archer at email@example.com