NEW YORK Metallurgical and thermal coal producer James River Coal Co. has idled or closed 3 million tons of production capacity in response to soft demand, the company said.
The Richmond, Va.-based company has idled five underground mines and reduced production at three surface mines in the central Appalachia region, the company said.
"The year 2012 will be remembered as one of the most difficult years in the history of the U.S. coal industry," chairman and chief executive officer Peter T. Socha said, citing lackluster economic conditions, competitive pressures from natural gas and weak international markets in Asia and Europe.
The company reported a net loss of $138.9 million in 2012, more than triple the net loss of $39.1 million in 2011, on revenue that fell 6.6 percent to $1.1 billion from $1.2 billion. The 2012 net loss included a goodwill impairment charge of $26.5 million, the company said.
Adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) totaled $54.7 million in 2012, down 64.6 percent from $154.6 million in 2011.
James River has cut operating costs by reducing its work force by 400 and trimming working hours.
However, not all the news was gloomy.
"As we look ahead to 2013, both (Asia and Europe) are showing marginal improvement," Socha said. "The thermal market, although still weak, is starting to improve due to reduced production by the coal industry and slightly better weather conditions. The met coal market is seeing clear signs of increased demand from Asia."
A version of this article was first published by AMM sister publication Steel First.