ICG warns of staff cuts

AS it awaits takeover by Missouri-based Arch Coal, Appalachian producer International Coal Group has reportedly flagged significant downsizing at its corporate headquarters.
ICG warns of staff cuts ICG warns of staff cuts ICG warns of staff cuts ICG warns of staff cuts ICG warns of staff cuts

The ICG Beckley complex in West Virginia. Courtesy International Coal Group.

Donna Schmidt

According to local news outlet WSAZ, ICG issued a Worker Adjustment and Retraining Notification, or WARN notice, to the county commissioners May 12 for its headquarters in Putnam County.

WARN notices are required by US law to ensure advance notice of significant layoff activity.

ICG said in the documentation that positions at its location at 300 Corporate Centre Drive in Scott Depot would be eliminated after the closing of the $US3 billion takeover of the company by Arch Coal announced earlier this year.

The notice reportedly goes on to list 100 positions and the name of the associated employees that will be affected by the job cuts, which are expected to commence as early as July 11.

"As a result of the merger, most, if not all, corporate functions at ICG will be consolidated with corresponding corporate functions at [Arch]’s headquarters in St Louis, Missouri, resulting in the permanent termination of employment of ICG employees in those positions," WSAZ reported.

The acquisition of ICG will increase Arch’s reserves by 25% to 5.5 billion tons. Arch will be the US’ second-largest coking coal producer after Alpha once the acquisitions are completed.

As part of the takeover Arch will acquire ICG’s 13 active mines, along with one major mining complex under development, across three coal basins in Illinois, Kentucky, West Virginia, Maryland and Virginia.

Arch expects its 2011 pro-forma metallurgical coal sales to reach 11Mt.

Over the next three years, Arch anticipates met coal volumes from the combined operations to expand to more than 14Mtpa, with further opportunities for revenue growth emerging from significant blending opportunities between ICG's low-volatile and rank A high-volatile met coals and Arch's existing rank B high-volatile met products.

"The combination with ICG creates a highly effective platform for optimizing the value of the combined company's met product slate and for creating entirely new synthetic blends of mid-volatile met coals that command a significant premium in the global market," Arch president and chief operating officer John W. Eaves said last month.

The merger of Arch and ICG is expected to be completed in June.

In the meantime, ICG is facing legal troubles over its takeover in the form of shareholder lawsuits.

According to a recent Associated Press report, ICG general counsel Roger Nicholson confirmed that suits challenging the deal had been filed in both Putnam County and Delaware County.

He told the news service the company would defend itself against the cases and believed the claims had no merit.