HENDERSON COUNTY, Ky. — Patriot Coal Corp. is permanently closing its Freedom underground mine in eastern Henderson County this summer, causing the loss of jobs for 156 active miners and possibly more.
The company in a news release cited “continued weakness in market demand.”
In addition to the jobs lost at the Freedom mine itself, another seven people could lose jobs at the Bluegrass mining complex office in Henderson (of which Freedom is a part) and up to 37 people may be let go from the Grand Eagle coal preparation plant in Henderson, according to the WARN (Worker Adjustment and Retraining Notification) notice that Patriot sent to county and state officials on Friday morning.
That could push the total layoffs to 200 people.
Also affected will an unspecified number of people who have been on layoff status or are otherwise not actively working at the facilities.
“I was just going out the door to the Tri-Fest to get something to eat when I was handed this paper” with the layoff notice, Henderson County Judge-Executive Hugh McCormick said Friday afternoon. “It took my appetite away.”
Coal mining pays some of the highest wages in this area. Weekly wages in Henderson County’s mining sector averaged more than $1,500 a week in 2010 or nearly $80,000 a year, according to the Kentucky Office of Employment and Training.
“Any time you lose jobs like that, good-paying jobs, a lot of them, it trickles down through the community,” McCormick said.
“Just when we thought things were getting better, with the unemployment rate below 8 percent, something like this hits,” he said.
“I think about the families” of workers losing their jobs, McCormick said. “For the economy, for our town, this is devastating. They (Patriot) are a good corporate citizen.”
The WARN notice gave no indication of layoffs at the Patriot surface mine that remains in operation near Hebbardsville, Ky.
Employers with 100 or more employees are generally required to give a 60 days’ WARN notice to local, state and, if applicable, union officials before a facility closure affecting 50 or more workers or a mass layoff. Freedom mine is a nonunion operation.
The mine, the mine complex offices and prep plant are all located near the Green River on Kentucky 1078-South, approximately two miles south of the Audubon Parkway. They are affiliated with Ohio County Coal Co. LLC, a subsidiary of Patriot Coal.
“Thermal coal markets remain weak as a result of the mild winter, coupled with low natural gas prices and reduced demand for electricity related to the economic downturn. We are taking this step to align production with committed sales,” Patriot Executive Vice President and Chief Operating Officer Bennett K. Hatfield said in a statement Friday.
Last year, the Freedom mine produced 1.2 million tons of thermal coal, which is burned to generate steam for producing electricity at power plants. It has won several safety awards including top national honors from the U.S. Labor Department’s Mine Safety and Health Administration for its safety record in 1995 after the mine — which at the time employed 83 people — logged 213,878 work-hours without a lost-time injury or death.
Earlier this year, Patriot idled three smaller central Appalachian thermal coal mines that together produced about 1.2 million tons in 2011.
In total, including Friday’s announcement and the previously announced closure of the Big Mountain complex in West Virginia, Patriot has slashed annual thermal production by more than 4 million tons compared with last year.
With those cutbacks, the company will produce no thermal coal this year that isn’t already being sold through a contract.
Patriot plans to provide updated earnings guidance for 2012, including anticipated thermal coal volume, when it announces its first quarter earnings.
Patriot shares tumbled 52 cents, or 7.7 percent, to close at $6.21 in trading on the New York Stock Exchange on Friday.
Based in St. Louis, Patriot Coal is a leading producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin.
That includes the Freedom underground and Patriot surface mines in Henderson County and the Highland and Dodge Hill mines in Union County, Ky.
The company reported net losses of $48.0 million in 2010 and $115.5 million in 2011