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Patriot Coal Idles Two Large Mines in Western Kentucky

alrp.com

Patriot Coal will idle two large coal mines in Western Kentucky, beginning today. As many as 650 workers could be affected.

Patriot warned layoffs could be coming earlier this month, when it issued WARN notices to employees at its Highland and Dodge Hill mines. 

Coal mine closures are becoming predictable in Eastern Kentucky; the region has shed more than 6,000 coal jobs in the past three years. But production and employment have been steadier in Western Kentucky, with fewer large-scale layoffs.

The Highland mine employs around 480 people, some of which reside in Illinois and Indiana. Henderson County Judge Executive Hugh McCormick says this isn’t the first closing for some of the miners. 

"We know there's folks who've picked their families up and moved from eastern Kentucky to west Kentucky for these jobs and now they're displaced again, without an income again," said McCormick. "It's a devastating impact on this whole tri-state area."

To the southeast in Union County, the Dodge Hill mine employs around 180 people. Judge Executive Jody Jenkins says the closing will have a devastating impact on the local economy and that the timing couldn’t be worse for the community.

“It’s terrible for the families and friends that we have here; the people we go to church with and kids go to school together, play ball together," said Jenkins. "It's devastating to have this kind of news anytime, but particularly during Christmas and the holidays. It will be a struggle until these folks get some closure on what the future holds for them.”  

A decision hasn’t been made yet as to whether the layoffs will be permanent. Jenkins says the hardest part is dealing with the level of uncertainty.  

“I think some closure for these folks is what so hard to have to deal with," said Jenkins. "Soft coal prices or it’s natural gas or it’s the president’s administration and their actions on coal and it’s frustrating for these families and it’s frustrating for us to know they’re going through that.”

McCormick and Jenkins are working with local economic development officials to handle the job loss in their counties, but they don’t think they can soften a blow this large. 

“600 people lose their jobs, you don’t just replace those kind of jobs," said McCormick. "Most of those guys earned their money. They go underground and provide us with coal so we can have electricity but some of them are used to a $75,000/$80,000 year job. You just don’t find that kind of job that easy.”  

The Heritage preparation plant near Morganfield and the barge loading terminal on the Ohio River will continue processing and shipping coal.

In a WFPL interview earlier this month, IHS Global Insight analyst James Stevenson said the potential closures of Highland and Dodge Hill weren’t necessarily a sign that Western Kentucky coal was about to begin a decline like the eastern coalfields.

[Stevenson] said structurally, not much has changed. Power plants that want to continue to burn coal are switching to the cheaper Illinois Basin mines. But more and more coal mines in the region now longwall mines, which is a method of underground mining. And Patriot’s two operations use what’s known as a “continuous miner.”

“The only real structural thing is that a higher and higher percentage of mining in the Illinois Basin is coming from longwall mines,” Stevenson said. “If you have a continuous miner, that’s more expensive than longwall. And insofar as there’s kind of competition between Illinois Basin mines, a longwall will win every time.”

So, Patriot’s Highland and Dodge Hill mines are facing more competition from cheaper coal in their own basins. To add to that, Stevenson said barge rates are up, so it’s less feasible right now to try to send excess coal to Europe.

But overall, he said even if Highland and Dodge Hill close, he’s projecting an increased demand for Illinois Basin coal over the next decade.

“You’ll see perhaps some erosion in the more expensive Illinois Basin mines, but for the most part, the demand for Illinois Basin coal has been rising enough to keep all of them running,” he said. “Illinois Basin in aggregate is going to grow for the next 5-10 years. And then a decade or so of stability, and after that, decline. And that decline is driven by domestic retirements and decline of European coal demand.”

Patriot’s Highland Mine was in the news again only two weeks ago, when a coal miner was killed there. Eli Eldridge, 34, was struck by a coal hauler on Dec. 16, and state and federal regulators are investigating the accident.

Patriot cited low natural gas prices and federal environmental regulations as the factors making the company’s mines less competitive. The mines are in Rep. Ed Whitfield’s district; he issued a statement blaming the idling on President Obama.

“(Patriot Coal) is one of many mining companies threatened as a direct result of President Obama’s agenda to destroy the coal industry in America,” he said in a statement.

Patriot Coal hasn’t said what the future holds for the two mines, only that a decision about future coal productionwill be made after reviewing the company’s strategic options.

Erica Peterson is a reporter and Kentucky Public Radio correspondent based out of WFPL in Louisville, Kentucky.
Rob Canning is a native of Murray, KY, a 2015 TV Production grad of Murray State. At MSU, he served as team captain of the Murray State Rowing Club. Rob's goal is to become a screenwriter, film director or producer and looks to the likes of Quentin Tarantino and Guy Ritchie for inspiration. He appreciates good music, mainly favoring British rock n' roll, and approves of anything with Jack White's name on it. When not studying, rowing or writing, Rob enjoys spending his free time with a book or guitar.
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