US-based coal producer Walter Energy, Inc. has announced that it will begin idling its Canadian operations, including the Wolverine and Brazion coal mines in British Columbia, this month, due to the unfavorable coal pricing environment.
The company will place its Wolverine mine on idle status effective immediately. Brazion will continue to operate the Brule mine but expects to idle it by July this year. The company will continue to operate its preparation plants at these mines to complete processing of coal that has already been mined and is in inventory.
According to Walter Energy, in 2013 coal production from Wolverine, which produces mid-volatile hard coking coal, was 1.6 million mt, while the Brazion mines produced approximately 1.9 million mt of low-volatility PCI and 100,000 mt of hard coking coal. As of December 31, 2013, Walter Energy had approximately 1.1 million mt of coal in inventory in Canada.
Walter Energy expects to incur severance charges of approximately $7 million in the second quarter of 2014 in connection with the idling of the mines. Employment impacts include temporary layoffs of approximately 415 employees at the Wolverine mine and approximately 280 employees at Brazion.
