Published: April 29, 2009 11:18 pm      

Appalachian Fuels idles operations

Action ‘impacting approximately 400 employees’

ASHLAND — Officials at Ashland-based energy company Appalachian Fuels have confirmed hundreds of recent layoffs and an idling of mining operations throughout the region.

According to a statement released by Appalachian Fuels Wednesday afternoon, the recent downturn in the economy has significantly decreased demand for coal.

“Appalachian Fuels, LLC has been forced to temporarily idle all of its mining operations in Kentucky and West Virginia to evaluate when the market will improve. Over the past two weeks, the company has taken steps to idle all six of its active mines impacting approximately 400 employees,” according to the statement.

The company’s operations in Bowie, Colo., will not be affected. Its operations in Illinois will be reduced significantly but will continue to produce on a limited production schedule.

“We’re the unfortunate victim of an economic domino effect,” Stephen Addington, president of Appalachian Fuels, said. “As we see the auto industry produce and sell fewer cars, the ripple effect on us is that they use less steel which reduces the demand for coal. Demand is further impacted as more factories are idled and utilities are selling less electricity, which means another drop in demand for our product. In addition to these near-term market dynamics affecting our company and industry, there are many long-term challenges being pushed down from the EPA that impact our ability to build for the future.

“We remain determined to weather these challenges,” Addington said. “Unfortunately, when the supply and demand lines cross at a point where we cannot produce coal at a price to cover expenses, we have no choice other than to idle the operations until demand returns. We appreciate the support of all employees and long-term relationships with our company.”

Appalachian Fuels produces and sells coal for electric utilities and coking coal plants, with surface mines and underground mining operations in eastern Kentucky and West Virginia. The company is headquartered in Ashland as a limited liability corporation and operates as a subsidiary of Energy Coal Resources Inc.

Kelly Felty, local office manager for the Boyd County Office of Employment and Training, said reports about the Appalachian Fuels action have reached his office, although it hasn’t seen an abundance of displaced workers.

“We’ve had a few, but not many,” Felty said Wednesday morning.

The Appalachian News Express of Pikeville reported several employees of Ashland-based Appalachian Fuels have filed unemployment claims. All of those workers have cited a layoff as the reason for their claim, said Trina Allen, operations administrator for the Office of Employment and Training in Pikeville.

According to the Mine Safety and Health Administration’s Data Retrieval System, Appalachian Fuels’ four Pike County operations employed 259 in the first quarter of this year. The company also operates facilities in Fayette County, W.Va. The total number of Pike County workers affected by the layoffs was not immediately known, the Pike County newspaper reported.

Earlier this month, TECO Coal subsidiary Premier Elkhorn Mining announced it may have to close two underground mines, one in Pike County and another that straddles the Pike and Letcher County line. That closing, company officials said, could affect as many as 102 workers.

Pike County officials are already dealing with layoffs announced last month by Rhino Energy subsidiary CAM Mining at Pike County operations. The company announced the layoffs in March but did not say how many workers were affected.

The Appalachian Fuels layoffs followed a court decision, filed last week in a federal lawsuit, that will cost Appalachian Fuels $15 million, according to The Appalachian News Express.

TIM PRESTON can be reached at tpreston@dailyindependent.com or at (606) 326-2651.