Louisville, Kentucky (Platts)--14Dec2012/558 pm EST/2258 GMT
A Cline Group subsidiary is cutting production and its workforce by 50% at its Shay No. 1 underground steam coal mine near Carlinville in Macoupin County, Illinois, a state mining official said Friday. The official, who asked not to be identified, said the company is idling one of the mine's two continuous miner units, a move expected to result in layoffs of about 50 miners. "Cline has a bunch of low-cost coal about to come online" at new longwall mining operations in Illinois, the official noted. According to the official, Shay miners were told of the layoffs in a meeting Friday morning at the mine. Cline, through its Foresight Energy Partners unit, owns four longwall mining complexes in Illinois. In peak production, they are forecasted to turn out more than 30 million st/year of high-sulfur coal. Phil Gonet, president of the Illinois Coal Association, said he was not surprised when told about the Shay cutbacks. "Those are the rumors out there," Gonet said in an interview, adding he had heard them from three other coal operators, but had not been in direct contact with Cline representatives. Nevertheless, he said: "It's hard for a continuous miner operation to compete with longwalls," which produce coal much more cheaply. MaRyan Mining, a Cline affiliate, operates Shay. Neither Foresight nor MaRyan officials could be reached for comment by press time. Cline acquired the Shay mine, then known as Monterey No. 1, from ExxonMobil in 2009. It was ExxonMobil's last remaining US coal property. The mine produced 1.27 million st in the first three quarters of 2012 and 1.8 million st in 2011, US Mine Safety and Health Administration figures show. The mine has 102 employees. Reductions at Shay reverse a trend of expanding coal output in the state. Thanks largely to the new Cline longwall operations, plus the new Lively Grove underground mine in Washington County that fuels the new 1,600-MW Prairie State Energy Campus coal plant, the state is expected to produce 40-45 million st in 2012, up from 38 million st in 2011, Gonet said.--Bob Matyi, newsdesk@platts.com --Edited by Valarie Jackson, valarie_jackson@platts.com