Patriot Coal idles one more mine as demand dips
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A weak export market and customers switching to natural gas has impacted Patriot Coal Corp. which announced that it will idle a thermal coal complex. The company had already cut back on production of steel-making coal.
Other companies have made similar moves. Reuters reported that power producers such as FirstEnergy Corp, American Electric Power and Duke Energy are shutting down many of their coal-fired plants in response to stricter environmental rules.
Clean-burning natural gas, whose prices had recently plunged to their cheapest relative to coal since 2009, is fast emerging as a replacement to coal for power generation.
“Headwinds created by low natural gas prices, mild weather, and weaker international and domestic economies impacted coal markets during the year, and market weakness continues as we enter 2012,” Patriot Coal Corp chief executive Richard Whiting said in a statement.
Thermal coal on the globalCOAL Newcastle index for the week to date closed at $118.47 per tonne on Feb. 1, down from $121.68 a week earlier.
Patriot Coal said it will idle its Big Mountain complex in Boone County, West Virginia, which had produced 1.8 million st of its total thermal coal output last year.
Last month, the company halted met-coal production at two units and three contractor-operated mines in Southern West Virginia.
Whiting said several of these idled units could be back in production sometime this year.
Peabody Energy spin-off Patriot Coal posted its fourth straight quarterly loss, hurt by weak domestic and export demand, and forecast lower sales volumes for this year, Reuters reported.
For 2012, the company forecast sales volume of 27 to 29 million st, including met coal sales of 7 to 7.8 million st. Total sales volume were 31.1 million st and met coal sales were 7.4 million st last year.
Patriot Coal posted a net loss of 42 cents per share, compared with a profit of 8 cents per share. Revenue rose 14.3 percent to $603.9 million.



