Alliance counts mine repair costs

ALLIANCE Resource Partners is considering contingency plans for its idled Pontiki room-and-pillar operation in Kentucky as the company analyzes the cost of mandatory repairs.
Alliance counts mine repair costs Alliance counts mine repair costs Alliance counts mine repair costs Alliance counts mine repair costs Alliance counts mine repair costs

The Pontiki mine, courtesy Alliance Resource Partners

Justin Niessner

The Oklahoma-based coal miner idled Pontiki last August after being issued with a US Mine Safety and Health Administration order regarding a failure of a belt line between two of the facility’s stacking tubes.

An independent investigation into the safety issue was made and Alliance is studying the finding and their financial ramifications.

“[Alliance] will make every reasonable effort to keep the mine open so that Pontiki can continue safely producing and providing quality jobs to our hardworking employees,” Alliance president and chief executive Joseph Craft said.

“We are working diligently with all parties with a vested interest in Pontiki’s future and expect to complete our evaluations within the next two weeks.”

Alliance said that although it expected the idling of the 7 million tonne coal mine to have a negligible impact on the company’s future cash flow, plans to indefinitely suspend operations and redeploy equipment to other mines were in development.

The company was also considering a possible impairment charge of up to $34 million.

Prior to the suspension of operations, Pontiki employed 197 workers and produced 558,000 tonnes of low-sulfur coal this year.

Alliance said Pontiki’s total 2011 coal output was 1Mt.

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