Patriot Coal to cut met coal production US' Patriot Coal to cut met coal production on lower prices, demand
Washington (Platts)--13Jan2012/953 am EST/1453 GMT
Patriot Coal will reduce metallurgical coal production at its mines in southern West Virginia in response to weaker market demand for the product, the St. Louis-based company said Friday.
Patriot said it will idle one contractor-operated mine and two subsidiary-operated production units in the Rocklick complex. Two contractor-operated mines in the Wells complex also will be idled.
"Metallurgical coal demand has trended steadily downward in recent weeks, most notably in the export market," Patriot President and CEO Richard Whiting said in a statement. "These production cuts, in conjunction with other cost-reduction measures being implemented concurrently, are aimed at lowering our mining costs, aligning production with identified sales, and preserving high-quality reserves for a stronger market."
"During 2011 we increased metallurgical coal production to match the needs of the market," Whiting said. "The modular nature of our Met Build-Out program allows flexibility to dial production up or down in line with market circumstances. These changes will trim output from our highest cost sources while the met market finds its balance. As world economies return to normal growth rates, we expect a resumption of the longer-term growth trend for metallurgical coal demand that should allow us to bring much of this production back on line."
Patriot said it will issue 2012 guidance, including anticipated metallurgical coal volume, when it releases its fourth-quarter earnings.