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Alpha closing 8 mines, cutting 1,200 jobs in all

| Tuesday, Sept. 18, 2012, 10:44 a.m.

MORGANTOWN, W.Va. — Coal producer Alpha Natural Resources said on Tuesday it was cutting production by 16 million tons and eliminating 1,200 jobs companywide, laying off 400 workers immediately by closing mines in Virginia, West Virginia and Pennsylvania.

The shutdowns will start on Tuesday, and the rest of the layoffs will be completed by the end of the first quarter after Alpha fulfills sales obligations, Chief Executive Officer Kevin Crutchfield said. In all, the layoffs amount to nearly a 10th of Alpha's 13,000-person workforce.

Alpha said it was closing four mines in West Virginia, three in Virginia and one in Pennsylvania. They are a mix of deep and surface mines, and all are non-union operations.

Spokesman Ted Pile said most of the displaced workers may eventually be rehired, either assigned to jobs in other locations or replacing outside contractors. Only 150 workers in West Virginia and three in Pennsylvania will not have other employment opportunities with the company, he said.

Although some miners will stay on to seal the operations, most will either be reassigned or laid off immediately.

In Pennsylvania, Alpha will close its Dora deep mine in Jefferson County. The affected West Virginia operations are the Alloy deep mine near Powellton, the Alloy surface mine near Boomer, the Premium highwall mine near Gilbert and the White Flame Surface Mine near Wharncliffe. The Virginia mines are Guest Mountain deep mines No. 8 and No. 9 near Norton, and the Twin Star Surface Mine near Hurley.

In Western Pennsylvania, Alpha locations include the Cumberland and Emerald mines in Greene County, both with offices in Waynesburg, along with Pennsylvania Services Corp. and Coal Gas Recovery LLC, both with the same Waynesburg address, and Amfire Mining Co. LLC in Latrobe.

Bristol, Va.-based Alpha will cut production by 16 million tons by early 2013 and reduce overhead by $150 million as it shifts from thermal coal used in domestic power generation to concentrate on metallurgical coal used in steelmaking overseas.

Globally, “there remains a structural undersupply” of metallurgical coal, Crutchfield said, and Alpha expects demand to grow by more than 100 million tons by the end of the decade.

Alpha's $7.1 billion acquisition of Massey Energy helped create “one of the most valuable met coal franchises in the world,” Crutchfield said, effectively doubling its production potential. It has 25 million to 30 million tons of export capacity through the East Coast and the Gulf of Mexico, giving it the ability to scale up exports quickly, he said.

About 40 percent of Alpha's production cuts will come in high-cost Eastern mines “that are unlikely to be competitive for the foreseeable future,” Crutchfield said, while about half will occur in the Powder River Basin in Wyoming, the largest coal-producing region in the country.

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