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Consol to Idle West Virgina Coal Mine After Demand Drops

Blasting at the surface of a mountaintop coal mine in West Virginia. Consol Energy's Fola mining complex (not shown) will lay off workers due to a decline in demand. Photograph by Thorney Lieberman Close

Blasting at the surface of a mountaintop coal mine in West Virginia. Consol Energy's... Read More

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Blasting at the surface of a mountaintop coal mine in West Virginia. Consol Energy's Fola mining complex (not shown) will lay off workers due to a decline in demand. Photograph by Thorney Lieberman

Consol Energy Inc. (CNX), the second- biggest U.S. coal producer, will idle its Fola mining complex in West Virginia after domestic demand for the fuel declined and stockpiles increased.

The company will start laying off about 318 workers starting Aug. 30, Pittsburgh-based Consol said in a statement today. The move will reduce its 2012 production by 800,000 tons. Consol said the “direct economic impact” of Fola is $165 million a year.

Consol is the latest U.S. coal producer to announce a cutback in output as cheaper natural gas, a warm winter and moves by the Environmental Protection Agency to curb emissions from coal-burning power plants have reduced demand for the fuel. Domestic coal use has dropped to the lowest since at least 1973, according to a June 5 Energy Information Administration report.

“The warm winter resulted in the growth of our utility customers’ stockpiles and their inability to accept committed coal shipments,” Consol President Nicholas J. DeIuliis said in the statement. “The escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry.”

Peabody Energy Corp. is the largest U.S. coal producer by revenue.

To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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