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Walter J. Scheller III, Chief Executive Officer of Walter Energy, Inc.
, today provided an update on the Company's decision
to curtail production at its Willow Creek mine.
"Over the past 18 months, since I became CEO, one of my key priorities has
been aggressive operational management," Mr. Scheller said. "While it is
never easy to curtail operations at a facility, our commitment to idle
operations where necessary is central to the Company's operating plan. This
plan has been developed with the full support of our Board.
"We greatly regret the impact this decision will have on many of our
dedicated employees," Mr. Scheller continued. "I would like to commend them
for their work in significantly improving our productivity and costs at the
mine over the past year.
"The current price environment for met coal dictated that we curtail
production at Willow Creek in order to ensure we generate a sufficient
economic return in mining the high quality met coal reserves at the site.
Given the tremendous progress that has been made in the cost structure at
the mine, when we see signs of sustainable market pricing conditions we
would expect to ramp up production," Mr. Scheller concluded.
The mine, which will be curtailed in April, currently employs approximately
350 employees, of which approximately 250 will be affected by the decision
to curtail production. The Willow Creek mine will continue with limited
operations to support Walter Energy's Brule mine.
Willow Creek is the fifth mine Walter Energy has announced plans to curtail
or idle as part of its initiatives to address underperforming assets. Last
week the Company said it was accelerating the closure of its North River
underground mine in Alabama. In addition, the Company has also idled the
Aberpergwm mine in South Wales and the Gauley Eagle underground and surface
mines in West Virginia, and has curtailed production at its Maple
underground mine, also in West Virginia.
As previously disclosed, the Company expects to record a one-time cash
charge of approximately $7.5 million in severance costs in connection with
its curtailing production of the Willow Creek operations. The Company
currently expects that full year 2013 metallurgical coal production will be
in line with production levels in 2012.
The Willow Creek surface mine, located near the town of Chetwynd in
Northeast British Columbia, produces metallurgical coal with production
plans of one third hard coking coal and two thirds low-volatile PCI coal
over the mine's expected 20-year life. The Willow Creek mine had
approximately 19.0 million metric tons of recoverable coal reserves as of
December 31, 2012.
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