Foundation closes IL operation

AMIDST a union strike situation but also citing the mine’s ongoing financial losses, producer Foundation Coal announced Wednesday it would close its Wabash mine in Illinois.
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Wabash's DBT continous miner

Donna Schmidt

Wabash was one of three operations that the United Mine Workers of America said it would strike at beginning at 12.01am that day. Company officials said that bargaining talks between the two had failed and that the union’s 2007 National Bituminous Coal Wage Agreement would not be signed.

“Wabash does not believe it can justify continued operations absent a different wage agreement and a large recapitalisation effort. The UMWA initiated a strike at Wabash at 12:01 this morning,” the company said.

The operation sustained losses of more than $US26 million in 2006 and entered into 2007 at a loss as well; it has cited “extensive aged infrastructure, geologic challenges, and soft market conditions” as cause for the financial issues.

“Despite the best efforts of Wabash employees, the mine faced economic and market challenges that ultimately proved too difficult to overcome,” said Wabash president Jeffrey Kukura.

About 230 UMWA-represented hourly workers will become unemployed by the decision, but Foundation did note that it would keep its salaried employees for “several months” to assist with the closure.

The majority of the equipment underground at the 30-year-old mine will be removed, water and ventilation will be stopped and all slopes and shafts throughout the mine will be sealed and the entire complex abandoned, the company confirmed.

“The decision to close a mine, particularly one as long-lived as Wabash, is never easy. We recognise that this news is difficult for our employees and the community, but we will work towards a plan that we believe will be a positive step in easing the transition for Wabash employees,” Kukura said, adding that the mine “remains willing to negotiate with the UMWA on the effects of the mine's closure on the hourly workforce”

The UMWA issued a statement Friday, saying the mine’s fate was sealed regardless of the two parties’ abilities to come to an agreement.

“Foundation Coal has known for years that the Wabash Mine is an economically troubled mine,” it said.

“They asked our members to make concessions in the previous agreement, and our members did – to the tune of $30,000 per member.

“That was not enough, apparently. Instead of recognising the hard work our members have done and the sacrifices they have made, Wabash Mine Holding Company wanted more.”

It added that Foundation’s “brutal” release only serves to reinforce its determination.

“That the company chose to make its announcement today is revealing. We will continue to fight for every miner and family at all three mines [and] closing Wabash will not change that fact.”

Foundation spoke up again Friday afternoon in a public statement to restate its commitment to the remaining two mines to come to an agreement with the UMWA.

“Cumberland and Emerald remain hopeful that talks with the UMWA will result in an agreement to sign the 2007 National Bituminous Coal Wage Agreement (National Agreement) thereby allowing nearly 1000 striking Cumberland and Emerald employees to return to work.”

Company spokesman Peter Vietti also responded to comments from the union on the financial status of Cumberland and Emerald: “All the companies that signed the National Agreement were more profitable in recent years, and that is why the UMWA was able to negotiate such an exceptional National Agreement.

“This profitability is good for everyone,” he added, and noted that the economic impact locally and regionally cannot be argued: "The companies, their employees and the local communities are in this business together, and they hope the profitability continues. This allows them to purchase millions of dollars in goods and services from local businesses, to support various charitable donations, and enhances their ability to support community-wide efforts.”

It is the company’s hope, Vietti said, that the issues can be resolved expeditiously.

“Nobody benefits from a strike, and both of these employers remain ready to sign the National Agreement,” he said.

“Timely resumption of operations benefits our employees, their families and the communities in which they live. [To resume quickly] is in everyone’s best interests.”

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