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Amid financial woes, Alpha may shutter more mines

BECKLEY, W.Va. — Alpha Natural Resources had a tough April.

First, the New York Stock Exchange sent the company a warning letter that its stock was in danger of being delisted, as its paper value consistently fell below $1 per share. That was followed by West Virginia regulators expressing concern that Alpha would be unable to self-bond for mine cleanup costs. Then late last month the company said there was a possibility it could not afford to buy bonds from insurance companies.

 May really hasn’t been much better. For the first fiscal quarter of 2015 the company recorded a net loss of $176 million. Late last week, Alpha CEO Kevin Crutchfield warned the company could close more mines in 2015 if business does not improve.

Company financials show coal revenues were $726 million during the first quarter, a decline of $205 million from the fourth quarter of 2014 and down from $953 million during the same quarter last year.

“As you all know, we’ve been navigating through a long down cycle and the first quarter of 2015 was a continuation of that difficult environment for our industry,” Crutchfield said during a conference call with investors. “In fact, it’s become quite apparent that market conditions have deteriorated further since the beginning of the year. Frankly, these factors are outside of our control.”

Crutchfield said the last two years have turned into “a prolonged” coal market downturn. While there are some encouraging signs coming from Europe, the global metallurgical coal market remains stagnant as international steel capacity declines.

He continued that thermal coal “remains difficult as well,” a victim of slowing demand and ample supply continuing to push prices lower and lower, both domestically and abroad…

 

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