The decision including other recent changes in its Appalachian coal operations would mean a total layoff of about 750 workers in Kentucky, Virginia and West Virginia fields.
Arch Coal president and chief executive officer John W. Eaves said this decision was difficult but necessary in order to weather the current downturn and to position the company for long-term success.
"Current market pressures and a challenging regulatory environment have pushed coal consumption in the United States to a 20-year low," said Eaves.
"In response, we had previously streamlined capital spending, idled equipment and reduced shift work. We now are taking further steps to enhance our competitive cost position in Appalachia, while increasingly shifting our portfolio in the region toward higher-margin metallurgical coal operations."
Most of the cuts will be in the East Kentucky, Eastern and Knott County complexes while Arch’s subsidiaries would shut down three higher-cost mining complexes including associated preparation plants and temporarily idle Hazard’s Flint Ridge complex in Breathitt County.
Arch expects average cash cost in Appalachia to remain in the range of $68 per ton to $73 per ton, excluding severance and related costs.
The company said the actions will trim its annual thermal coal production by more than 3 million tons though it expects sales volume between 128 million and 134 million tons for 2012.
Arch also estimates future annual capital expenditure deductions in the range of $30m to $40m due to the idling of operations and redeployment of equipment into other active operations.
The company, which sold 157 million tons of coal in 2011, reported losses only in its Appalachian region in the first quarter of 2012, compared to the other two regions Western and Powder River Basin regions.
