DOW JONES NEWSWIRES Alpha Natural Resources Inc. (ANR) said it will scale back production at many of its central Appalachian coal mines, citing weakening demand from its electric utility customers. The mining company said it will immediately idle four mines in Kentucky and West Virginia and plans to idle two more by early 2013. Other mines will alter work schedules to reduce output, cutting overall production by 4 million tons a year. Some of Alpha's peers have disclosed or hinted at similar plans in recent months as stricter emissions standards prompt utilities to shut down coal-fired power plants rather than retrofitting them. New drilling techniques have also created a glut of natural gas in North America, dragging the fuel's price down to 10-year lows and making it more attractive to utilities. Alpha specifically cited pressure from competing natural gas as a reason for the production cuts. The production cuts will include about 2.5 million tons of thermal coal used by power plants and 1.5 million tons of lower quality metallurgical coal, the kind of coal used to make steel. Most of the curtailed production originates on CSX Corp.'s (CSX) rail system. The move will displace about 320 workers after available transfer positions are filled, the company said. "A business decision like this is so difficult because it impacts people and their families, but adverse market conditions left us no choice," said Chief Executive Kevin Crutchfield said. "In the days ahead, we will be examining all aspects of costs across our entire value chain, including cost reduction reviews with all key stakeholders." Alpha shares were recently down 18 cents at $22.60 after hours, while CSX was off 17 cents at $23. -By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com
