According to the Associated Press, the Pontiki Excel complex in Martin County had no choice but to lay off the workers in order to save other production units. The idled unit is the Excel Van Lear mine.

Parent company Alliance Resource Partners told ILN the closure was directly linked to a financial environment it felt would not end soon.

"Demand for coal delivered from Pontiki into the Norfolk Southern rail markets has declined significantly over the last 12 months and current customer indications are that this lack of demand could persist through 2010,” president Joseph Craft III said.

"While we deeply regret the impact on our employees, their families and their communities, without firm sales commitments at acceptable prices, we must reduce production in this market environment."

As a result of the closure, production for the remainder of the year will be about 150,000-200,000 tons lower than initially expected, the company confirmed.

Mine representative Elmer Howard told local media outlets his job of telling those affected was hard but necessary.

“This was the best economic alternative to keeping the remainder of our workforce intact,” he said, noting that Alliance hoped no more lay-offs would occur.

State officials didn’t immediately respond with comment, but Craft said the company was working with the Commonwealth of Kentucky’s Office of Employment and Training to provide help to the affected workers.

According to Alliance’s website, Excel Mining affiliate Pontiki conducts all mining operations at the underground complex, owns the complex and controls the reserves. The room and pillar operation was constructed in 1977.

Another Alliance property in the area is the MC Mining underground complex in Pike County, which the producer acquired in 1989. Also a room and pillar mine, it is owned by MC while Excel conducts operations.