Consol Energy Inc. could indefinitely lay off all 260 employees at its Mine No. 84 in Washington County by late March, the result of the steel industry downturn, company officials said Monday.
The Cecil-based company last week posted notice of the mine closing as required under the federal Worker Adjustment and Retraining Notification Act. Consol said in October it would lay off just 50 miners at No. 84, but keep the mine open to supply coal to the steel industry.
"The reason we gave the employees notice is the slowdown in the steel industry," said Consol spokesman Tom Hoffman. "We're trying to match our production to steel production, and right now, there's no demand for that grade of metallurgical coal."
Through the first eight months of 2008, steel production was up slightly from 2007's total. By late December, production had fallen to just over 1 million tons, from 2.1 million tons in late August, the American Iron and Steel Institute reported. Price per ton likewise was down about half from last summer.
Mark Segedi, president of United Mine Workers of America International Union Local 1197 in Ellsworth, which represents the majority of Mine No. 84 workers, couldn't be reached for comment.
Hoffman said coal from the Mine No. 84, located in Eighty Four, is so-called crossover coal, allowing it to be used by both the power generation and steel industries. For the last 10 years, the mine produced coal to be burned in power-producing plants.
During 2008, given that metallurgical coal prices rapidly were increasing due to steel industry demand, selling at mid-year in the $150 a ton range, Consol began converting No. 84 to continuous mining, a more labor-intensive way of mining, from the more efficient longwall mining system. High metallurgical prices overcame labor costs.
"We were going to mine about 600,000 tons this year at No. 84, from 3-1/2 to 4 million tons mined in 2008," Hoffman said. "With the continuous mining system, it's too expensive to return to mining for the power generation industry."
United Mine Workers of America Local 1198 in Monongahela represents three warehousemen and two draftsmen associated with Mine No. 84. "We received notification today (Monday) that the five members of our local were going to be laid off," said Ron Letavec, Local 1198's financial secretary.
"We're confident that they will be rehired."
Hoffman said that should conditions in the steel industry improve, Consol wasn't obligated to follow through on Mine No. 84 layoffs.
"The U.S., the new administration its talking about pumping billions of dollars into the economy, with infrastructure projects a major portion of the stimulus package here, and the Chinese are talking about a similar package," Hoffman said.
