Substantial mining assets at three affiliates of Alpha Natural Resources Inc. could be sold, the latest move by the struggling coal miner as it grapples with a deep industrywide slump.
In accordance with a worker law, operators of three Alpha affiliates have given notice to 292 employees at six mines and a processing plant in eastern Kentucky and southwest Virginia that the operations may be sold. The affiliates are Mill Branch Coal Corp., North Fork Coal Corp. and Pigeon Creek Processing Corp.
Keith Hainer, Alpha’s vice president of mining operators, said that the actions were “consistent” with the steps the company has taken in the past.
In May, Alpha said it plans to lay off 439 miners at a mine in south-central West Virginia.
Alpha’s creditors recently hired advisers to prepare for possible restructuring talks ahead of an August debt payment. The Virginia-based company, which is among the largest coal producers in the U.S., had $3.1 billion in long-term debt as of March 31, according to a filing. Creditors, as well as companies, tap advisers to explore options to raise capital, sell assets or cut debt through out-of-court restructurings or bankruptcy filings.
The effort comes amid a prolonged struggle for the American coal industry. Oversupply and tepid global demand has pushed the price of coal used in steelmaking to an 11-year low. Meanwhile, a plunge in natural-gas prices has prompted power-plant operators to switch to the relatively cheap and clean-burning fuel, damping demand for thermal coal used by power producers.
The Wall Street Journal
