UPDATE 2-Walter Energy to idle Canadian coal mines, cut 700 jobs

Tue Apr 15, 2014 1:38pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* To idle Wolverine, Willow Creek and Brule mines

* To record severance charge of $7 mln in Q2

* Shares rise as much as 5.7 pct (Adds comments from analysts, updates shares)

April 15 (Reuters) - Coal miner Walter Energy Inc said it would idle its Canadian mines and temporarily lay off about 700 employees, in the latest sign of stress in the industry.

The company said it would immediately stop production at its Wolverine and Willow Creek mines in British Columbia, while its Brule mine in the same province would likely shut down by July.

Walter's shares, which rose as much as 5.7 percent in morning trading, were down 1.6 percent at $7.67 in early afternoon trading on the New York Stock Exchange.

Coal companies are struggling with weak prices and a sharp drop in demand for both thermal coal, used in power generation, and metallurgical coal, used to make steel.

James River Coal Co filed for Chapter 11 bankruptcy protection last week.

With so-called "met" coal prices at $120 per ton for the hard coking variety, Walter's Canadian operations were losing about $27 million in annualized earnings before interest, taxes, depreciation and amortization (EBITDA), Brean Capital analyst Lucas Pipes wrote in a note.   Continued...