Walter Energy To Idle Canadian Opns., Cut Jobs

(RTTNews) - Coal producer Walter Energy Inc (WLT) (WLT.TO) said Tuesday it will begin idling its Canadian operations, including the Wolverine and Brazion coal mines in British Columbia, in April 2014.

The company will place its Wolverine mine on idle status effective immediately.

Brazion will continue to operate the Brule mine but expects to idle the mine by July 2014.

The company will continue to operate its preparation plants at these mines to complete processing of coal that already has been mined and is in inventory.

For 2013, coal production from Wolverine, which produces mid-volatile hard coking coal, was 1.6 million metric tons, while the Brazion mines produced about 1.9 million metric tons of low-vol PCI and 0.1 million metric tons of hard coking coal.

As of December 2013, Walter Energy had about 1.1 million metric tons of coal in inventory in Canada.

Employment impacts include temporary layoffs of about 415 employees at the Wolverine mine, about 280 employees at Brazion, and other administrative support staff.

A limited number of employees will remain at each site to operate the preparation plants and, once coal processing is complete, to perform ongoing equipment maintenance and provide ongoing security for the sites during the idle period.

"These coal reserves remain valuable assets, however, given the current met coal pricing environment, our best course of action at this time is to idle these operations until we can achieve reasonable value from these reserves," said CEO Walter J. Scheller III.

The company expects to incur severance charges of approximately $7 million in the second quarter of 2014 in connection with the idling of the mines.