The company will place its Wolvine mine, near Tumbler Ridge effective immediately. The Brazion, which includes the Brule and Willow Creek mines, will continue to operate but should be idled by July 2014.
The company will continue to operate its preparation plants at these mines to complete processing of coal that already has been mined and is in inventory.
At the Wolveine mine, 415 employees will be laid off and 280 at the Brazion operation. A limited number of employees will remain at each site to operate the preparation plants and, once coal processing is complete, to perform ongoing equipment maintenance and provide ongoing security for the sites during the idle period.
“These layoffs are particularly unfortunate because our employees have worked very hard to keep these mines competitive in the face of daunting market conditions,” said Walter J. Scheller III, Chief Executive Officer. “Equally important, they’ve worked safely.” Scheller noted that the Brule mine completed 2013 without a reportable safety incident.
“These coal reserves remain valuable assets,” Scheller added. “However, given the current met coal pricing environment, our best course of action at this time is to idle these operations until we can achieve reasonable value from these reserves.”
The company expects to incur severance charges of approximately $7 million in the second quarter of 2014 in connection with the idling of the mines.