Consol mothballs long-idled PA mine

TWO years after ceasing production at the longwall operation, Consol Energy said late Wednesday it would now finalize the closure of its costly Mine 84 operation in southeastern Pennsylvania in favor of more profitable coal ventures and shale gas efforts.
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Courtesy MSHA

Donna Schmidt

The producer initially idled mining at Mine 84 near Washington during the first quarter of 2009.

It currently has 32 hourly and 13 salaried employees recovering equipment and preparing for final sealing, and officials confirmed all staff had been offered other employment opportunities at nearby locations.

“This is a key component of the company's ongoing efforts to reallocate resources into more profitable coal operations and Marcellus shale drilling activities,” the company said.

“In the future, Consol will reassess the opportunities to access the metallurgical reserves in the Mine 84 area.”

Consol will incur a pre-tax charge of $US116 million as a result of its decision, $111 million of which will be non-cash. An estimated $5 million of the charge will result in future cash expenditures.

Conversely, the producer expects to realize a pre-tax cash savings of about $18 million annually from the closure.

The Pennsylvania-based producer began formally discussing closure plans for Mine 84 last year, and in October issued notices to 60 employees under the Work Adjustment and Retraining Notification Act.

Officials said at the time the operation had higher mining costs than current market prices, even though spot prices had been improving in the region.

"Mine 84 has been in operation for many decades, and it is unfortunate that the time has come when it was no longer able to compete in today's markets," Consol operations senior vice-president Jimmy Brock said.

Consol initially announced it would close Mine 84 in 2007 and laid off about 500 workers the following year.

According to company data, Mine 84 – which produces from the prolific Pittsburgh 8 seam in southwestern Pennsylvania via longwall and room-and-pillar methods – had 3.6 million tons of output in 2007, 1.83Mt in 2008 and just over 514,000t in 2009.

Consol owns 11 bituminous coal mining complexes in five states and has proven and probable coal reserves totaling 4.4 billion tons.