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Murray Energy expanding northern W.Va. coal mine

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Murray Energy expanding northern W.Va. coal mine

Murray EnergyCorp. is hoping to expand its Marion County coal mine.

In a statement to S&P Global Market Intelligence, MurrayEnergy said it recently filed a permit application with the West Virginia Departmentof Environmental Protection to add about 7,200 acres of coal reserves to theMarion County coal mine in northern West Virginia.

"This is simply an extension ofMarion County Coal Company'scurrent operations, which is done in the normal course of business," thecompany said in a statement. "The Marion County Coal Co. submitted thispermit application to ensure it has sufficient coal reserves for future mining."

The reserves are being added to an existing mine. Thecompany plans to develop the reserves in 2018 and they are expected to be minedwith the current longwall system at the mine.

According to U.S. Mine Safety and Health Administrationdata, the mine produced just 783,381 tons of coal in the second quarter. Themine produced nearly 1.9 million tons as recently as the fourth quarter of2015.

Murray Energy recently issued potential layoff notices to 4,400 employees, amove to comply with federal laws that would penalize the company if itconducted mass layoffs without offering a warning or severance pay. Despitenotices that would indicate potential layoffs across the Murray Energyoperation in September, the company said in a later statement that no layoffswere contemplated.

"The Marion County Coal Company sent thoselayoff notices as a precautionarymeasure, in order to comply with certain legal requirements, but no layoffs arecontemplated or expected at this time," a company statement sent July 14stated. "There is, however, no doubt that the United States coal industryhas been absolutely decimated by the destructive policies of the ObamaAdministration and by the increased use of cheap natural gas to generateelectricity."

The mine produces coal of medium sulfur content and a heatcontent of 13,050 Btu/lb. The company said the mine fits perfectly in its "concentricellipse" strategy frequently described by its founder. The cornerstone ofthat strategy is locating longwall minable coal reserves with high quality coalthat also have access to low-cost transportation and proximity to baseload coalpower generation plants.