Walter Energy, Inc. will begin idling its Canadian operations, including the Wolverine and Brazion coal mines in British Columbia, in April 2014.Th
Walter Energy, Inc. will begin idling its Canadian operations, including the Wolverine and Brazion coal mines in British Columbia, in April 2014.
The company will place its Wolverine mine (located near the district municipality of Tumbler Ridge) on idle status effective immediately. Brazion (which includes the operations of Bruleand Willow Creek and is located near the district municipality of Chetwynd) will continue to operate the Brule mine but expects to idle the mine 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.
For 2013, coal production from Wolverine, which produces mid-volatile hard coking coal, was 1.6 million metric tons, while the Brazion mines produced approximately 1.9 million metric tons of low-vol PCI and 0.1 million metric tons of hard coking coal. As of December 31, 2013, Walter Energy had approximately 1.1 million metric tons of coal in inventory in Canada.
Employment impacts include temporary layoffs of approximately 415 employees at the Wolverine mine, approximately 280 employees at Brazion, and other administrative support staff. 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.
Walter Energy is a leading, publicly traded "pure-play" metallurgical coal producer for the global steel industry with strategic access to high-growth steel markets in Asia, South Americaand Europe. The company also produces thermal coal, anthracite, metallurgical coke and coal bed methane gas. Walter Energy employs approximately 3,600 employees, with operations inthe United States, Canada and United Kingdom. For more information about Walter Energy.
