Walter to idle Canadian operations, cut jobs as low prices bite
US coking coal major Walter Energy will halt operations at its Canadian mining operations in the face of persistently low prices.
Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.
Operations at Walter Energy’s Wolverine and Brazion mines in British Columbia will be idled this month, the miner said on Tuesday April 15.
Wolverine, which produced 1.6 million tonnes of mid-volatility hard coking coal in 2013, will be idled immediately.
Brazion, which produced 1.9 million tonnes of low-volatility pulverized coal injection (PCI) material and 100,000 tonnes of hard coking coal in 2013, will continue to operate but its Brule mine will be idled by July this year.
“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,” Walter said.
Around 415 jobs will be lost at Wolverine and 280 at Brazion, the company said, with a limited number of employees remaining at each site to perform maintainance.
“These coal reserves remain valuable assets,” ceo Walter Scheller said. “However, given the current [metallurgical] 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.”
Coking coal prices have tumbled in the past six months in the face of industry oversupply and weak steel demand.
Steel First’s premium hard coking coal index fob Australia has dropped from more than $145 per tonne fob in November 2013 to just over $110 per tonne fob in April 2014.
The company expected to incur $7 million-worth of severance charges in relation to the idling of its operations.
Walter Energy is one of the world’s largest “pure-play” coking coal producers, with about 3,600 employees worldwide.