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Armstrong Coal warns Ky. mine workers of impending layoffs

Armstrong Coal Co. warned employees of layoffs as the company prepares to reduce its coal operations.

The Illinois Basin producer anticipates idling its Equality surface mine in Kentucky, according to an Oct. 5 news release. Armstrong said it will also reduce the workforce at a preparation plant and dock facility that processes coal from multiple Armstrong mines. The company employs 61 employees at the Equality mine and 49 employees at the preparation and dock facility.

"These actions were necessitated by market overproduction and a sustained depression in demand for high sulfur thermal coal produced by the Equality surface mine," the release said.

The layoffs are expected to occur between Dec. 8 and Dec. 22 and are expected to be permanent.

Armstrong Coal is a wholly owned subsidiary of Armstrong Energy Inc.

Armstrong Energy recently announced an agreement to restructure its balance sheet following extended negotiations over its financial struggles. The company also filed to suspend its SEC reporting obligations. Producers in the Illinois Basin region have been struggling with an oversupply of coal in the region.

MKM Partners Inc. Executive Director Daniel Scott recently wrote a report that said Armstrong's cost structure is several dollars above current market prices. He suggested that unlike other recent coal bankruptcies, a simple restructuring would not be enough to keep production going at the same rate.