Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 5, 1995 TAG: 9501050041
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
One mine closed last year and another closing is planned for early March.
The company expects to close the McClure No. 2 mine of its Clinchfield Coal Co. subsidiary sometime during the year, although those plans possibly could change, said Susan Copeland, a spokeswoman for the Pittston Coal Group in Lebanon.
McClure No. 2, which employs about 70 people, produces coal used to make steel, Copeland said. The closing has not been announced to employees but was alluded to in the company's 1994 third-quarter report to the Securities and Exchange Commission.
Because of intense foreign competition and lower prices for steel-making metallurgical coal, Pittston has decreased its coal production for the steel market and has increased production for steam boilers at electric power plants. The company also has been moving from underground production to more strip mining.
In the first nine months of 1994, 32 percent of production was from deep mines and 68 percent from strip mines. A year earlier, 55 percent came from deep mines and 45 percent from surface mines.
As a result of the shift from metallurgical coal to steam coal, Pittston's management "determined that four underground mines were no longer economically viable and would be closed," according to the company's quarterly report. The closings also would have significant impact on three coal-preparation plants serving the mines, the company said.
Two of the mines, the unionized Pittston Coal Group's Splashdam Mine in Dickenson County and an underground mine in Wise County owned by Pittston's nonunion Pyxis Corp. subsidiary, were closed last year.
Pittston said in October it would close its McClure No. 1 mine and adjoining coal-preparation plant at the end of 1994, laying off 145 miners and 35 salaried workers. The McClure No. 1 mine and plant, where 100 people still work, probably will remain open until March 1, Copeland said.
A closing date for the McClure No. 2 mine near Haysi has not been set, she said.
The company also closed a West Virginia strip mine last year because of rising costs and unfavorable mining conditions.
Pittston has laid off about 600 workers in the past 18 months in Virginia alone, Copeland confirmed. Virginia has lost 10,000 coal mining jobs since 1982, according to the Virginia Employment Commission.
As a result of the mine closings, Pittston took an accounting charge of $90.8 million, covering asset write-downs, lease payments, reclamation and environmental costs and employee severance and benefit costs. The charge was the major contributor to a $91 million loss for Pittston's coal operations during the first nine months of 1994.
However, Pittston's coal operations earned a $8.5 million profit in the third quarter, compared with $6 million in the third quarter of 1993. Pittston increased its sales volume by 37 percent in the third quarter of 1994 to 7.5 Million tons. Virtually all of the increase was in steam coal sales.
by CNB