NEW YORK (AP) â¿¿ Shares of Alpha Natural Resources Inc. fell Friday after the coal mining company announced plans to idle at least four mines and curtail operations at other facilities because of weak demand for coal used in power generation.
Alpha Natural's stock price fell more than 5 percent in afternoon trading as it hit an all-time low of $9.03 per share.
The Bristol, Va., company plans to idle four mines in Kentucky, close four more mines being operated by contractors and curtail production at other facilities. About 150 jobs will be eliminated.
Alpha Natural said the changes will cut thermal coal shipments by an additional 2 million tons in 2012 and 4 million tons in 2013. The company reiterated its 2012 shipment guidance.
Alpha Natural also will close satellite offices in Richmond, Va., Denver, Latrobe, Pa., and Linthicum Heights, Md., by the end of the year to consolidate support functions.
Other coal producers also have cut back production and shuttered mines to reduce costs this year because of weak market conditions.
Mild winter and spring weather has reduced demand for coal from utilities that use it as fuel to generate electricity. The other type of coal is metallurgical, which is used in steelmaking.
In addition, utilities and some manufacturers have switched from coal to cheaper natural gas for fuel. The price of natural gas has fallen nearly 25 percent this year because booming production has produced a glut.
"This year, utilities in the U.S. are expected to burn the least amount of steam coal than at any time in the last 20 years, and the pressure's been very intense on coal sourced from eastern Kentucky, particularly operations rendered uncompetitive due to fuel switching, relatively high rail rates and competition from Illinois Basin coal," Alpha Natural Chairman and CEO Kevin Crutchfield said in a statement.