Arch Coal (ACI) Cuts Production in Appalachia In Response to Weakness in Thermal Coal Market
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Price: $5.01 +1.01%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.2%
Revenue Growth %: -20.6%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.2%
Revenue Growth %: -20.6%
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Arch Coal, Inc. (NYSE: ACI) today announced plans to idle several operations and to reduce production at other mining complexes in Appalachia due to the unprecedented downturn in demand for coal-based electricity. Today's actions, along with other recent changes in Appalachia, will result in a total workforce reduction of approximately 750 full-time employee positions.
Arch's subsidiaries will close three higher-cost thermal mining complexes and associated preparation plants, temporarily idle Hazard's Flint Ridge complex and curtail production at other operations in Kentucky, Virginia and West Virginia. The mine locations affected by the announced closings are the East Kentucky, Eastern and Knott County complexes. For full year 2012, Arch expects average cash costs in Appalachia, excluding severance and related costs, to remain in the range of $68 per ton to $73 per ton.
Moreover, these actions will reduce Arch's thermal coal production by more than 3 million tons annually. However, Arch continues to expect thermal coal sales volume in the range of 128 million to 134 million tons for 2012. The company also plans to realize savings on future capital spending due to the idling of several operations and the redeployment of equipment into other active operations. Arch estimates future reductions in annual capital expenditures in the range of $30 million to $40 million.
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Arch's subsidiaries will close three higher-cost thermal mining complexes and associated preparation plants, temporarily idle Hazard's Flint Ridge complex and curtail production at other operations in Kentucky, Virginia and West Virginia. The mine locations affected by the announced closings are the East Kentucky, Eastern and Knott County complexes. For full year 2012, Arch expects average cash costs in Appalachia, excluding severance and related costs, to remain in the range of $68 per ton to $73 per ton.
Moreover, these actions will reduce Arch's thermal coal production by more than 3 million tons annually. However, Arch continues to expect thermal coal sales volume in the range of 128 million to 134 million tons for 2012. The company also plans to realize savings on future capital spending due to the idling of several operations and the redeployment of equipment into other active operations. Arch estimates future reductions in annual capital expenditures in the range of $30 million to $40 million.
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