Alliance Resource Partners, L.P. Announces Production Adjustments; Issuance of WARN Act Notices at Its Sebree and Gibson Complexes
Alliance Resource Partners, L.P. (NASDAQ: ARLP) announced today that in
response to continued uncertainty in the coal markets, it has taken
several actions to reduce production at its higher-cost mines in order
to focus on maximizing production at its lower-cost mines.
Beginning last Friday, October 30, 2015, ARLP's subsidiary, Hopkins
County Coal, LLC, reduced production from three units to two units at
its Elk Creek mine, which remains slated to cease production in the
first quarter of 2016. This action did not result in any job loss as a
result of employment opportunities at other ARLP operations.
On November 6, 2015, ARLP's subsidiary, Gibson County Coal, LLC,
issued Worker Adjustment and Retraining Notification (WARN) Act
notices to approximately 120 of its employees in anticipation of
eliminating a total of one and a half production units at its Gibson
North and Gibson South mines. By December 31, 2015, ARLP currently
expects production at the Gibson South mine to be increased to four
production units with the Gibson North mine idled.
On November 6, 2015, ARLP's subsidiary, Sebree Mining, LLC, issued
WARN Act notices to all employees at the Onton mine, and stopped coal
production at the mine. As a result of employment opportunities at
other ARLP operations, this reduction in force is expected to affect
approximately 140 employees.
"Unfortunately, prolonged weak market conditions made this production
response necessary," said Joseph W. Craft III, President and Chief
Executive Officer. "We deeply regret the impact of these decisions on
our employees, their families and their communities. While we were
hopeful that conditions would improve, an oversupplied market combined
with weak pricing forced us to take these actions and shift production
to our lowest-cost mines. These steps are consistent with our current
projected production and sales volumes for 2015 and beyond."
The Onton #9 Mine has generated 2015 year-to-date coal sales and
production volumes of approximately 1,861,000 tons and 1,869,000 tons,
respectively. Gibson North has generated 2015 year-to-date coal sales
and production volumes of approximately 1,939,000 tons and 1,983,000
tons, respectively. The Elk Creek Mine has generated 2015 year-to-date
coal sales and production volumes of approximately 2,537,000 tons and
2,648,000 tons, respectively.
Some of the coal production from the reductions at Onton, Gibson North,
and Elk Creek will be replaced by increased production at ARLP’s
lower-cost mines. ARLP confirms its previously announced earnings
guidance provided in its October 27, 2015 Press Release and Conference
Call, including 2015 full-year ranges for coal production of 41.1 to
41.7 million tons and coal sales volumes of 40.9 to 41.5 million tons
and 2016 full-year ranges for coal production and sales volumes of 40.0
to 45.0 million tons.
About Alliance Resource Partners, L.P.
ARLP is a diversified producer and marketer of coal to major United
States utilities and industrial users. ARLP, the nation’s first publicly
traded master limited partnership involved in the production and
marketing of coal, is currently the third largest coal producer in the
eastern United States with mining operations in the Illinois Basin and
Appalachian coal producing regions.
ARLP currently operates eleven mining complexes in Illinois, Indiana,
Kentucky, Maryland and West Virginia. ARLP also operates a coal loading
terminal on the Ohio River at Mount Vernon, Indiana.
News, unit prices and additional information about ARLP, including
filings with the Securities and Exchange Commission, are available at http://www.arlp.com.
For more information, contact the investor relations department of
Alliance Resource Partners, L.P. at (918) 295-7674 or via e-mail at email@example.com.
The statements and projections used throughout this release are based on
current expectations. These statements and projections are
forward-looking, and actual results may differ materially. At the end of
this release, we have included more information regarding business risks
that could affect our results.
FORWARD-LOOKING STATEMENTS: With the exception of historical
matters, any matters discussed in this press release are forward-looking
statements that involve risks and uncertainties that could cause actual
results to differ materially from projected results. These risks,
uncertainties and contingencies include, but are not limited to, the
following: changes in competition in coal markets and our ability to
respond to such changes; changes in coal prices, which could affect our
operating results and cash flows; risks associated with the expansion of
our operations and properties; legislation, regulations, and court
decisions and interpretations thereof, including those relating to the
environment, mining, miner health and safety and health care;
deregulation of the electric utility industry or the effects of any
adverse change in the coal industry, electric utility industry, or
general economic conditions; dependence on significant customer
contracts, including renewing customer contracts upon expiration of
existing contracts; changing global economic conditions or in industries
in which our customers operate; liquidity constraints, including those
resulting from any future unavailability of financing; customer
bankruptcies, cancellations or breaches to existing contracts, or other
failures to perform; customer delays, failure to take coal under
contracts or defaults in making payments; adjustments made in price,
volume or terms to existing coal supply agreements; fluctuations in coal
demand, prices and availability; our productivity levels and margins
earned on our coal sales; changes in raw material costs; changes in the
availability of skilled labor; our ability to maintain satisfactory
relations with our employees; increases in labor costs, adverse changes
in work rules, or cash payments or projections associated with post-mine
reclamation and workers′ compensation claims; increases in
transportation costs and risk of transportation delays or interruptions;
operational interruptions due to geologic, permitting, labor,
weather-related or other factors; risks associated with major
mine-related accidents, such as mine fires, or interruptions; results of
litigation, including claims not yet asserted; difficulty maintaining
our surety bonds for mine reclamation as well as workers′ compensation
and black lung benefits; difficulty in making accurate assumptions and
projections regarding pension, black lung benefits and other
post-retirement benefit liabilities; the coal industry’s share of
electricity generation, including as a result of environmental concerns
related to coal mining and combustion and the cost and perceived
benefits of other sources of electricity, such as natural gas, nuclear
energy and renewable fuels; uncertainties in estimating and replacing
our coal reserves; a loss or reduction of benefits from certain tax
deductions and credits; difficulty obtaining commercial property
insurance, and risks associated with our participation (excluding any
applicable deductible) in the commercial insurance property program; and
difficulty in making accurate assumptions and projections regarding
future revenues and costs associated with equity investments in
companies we do not control.
Additional information concerning these and other factors can be
found in ARLP’s public periodic filings with the Securities and Exchange
Commission ("SEC"), including ARLP’s Annual Report on Form 10-K for the
year ended December 31, 2014, filed on February 27, 2015 and ARLP’s
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and
June 30, 2015, filed on May 8, 2015 and August 6, 2015, respectively,
with the SEC. Except as required by applicable securities laws,
ARLP does not intend to update its forward-looking statements.
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