July 7, 2016 - 6:40 PM EDT
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Murray Energy backtracks after warning coal workers of possible layoffs

July 08--A week after warning 4,400 coal workers that their jobs may be in jeopardy, Bob Murray, CEO of Murray Energy, said Thursday that his company is doing "everything in our power" to avoid cuts.

Last week, 300 Southern Illinois coal workers were among those notified of potential layoffs that could take effect later this summer, raising the specter of another blow to the region's coal industry.

All employees of the American Coal Company, a Murray subsidiary that runs the New Era and New Future mines near Galatia, Ill., were given notices in compliance with the Worker Adjustment and Retraining Notification Act, which requires an advance warning of 60 days if widespread layoffs are possible.

Officials confirmed that the notices were issued to workers in six states where Murray has coal operations, encompassing approximately 80 percent of its current workforce.

The Ohio-based corporation, which touts itself as the nation's largest privately owned coal company, indicated in a press release last week that the move was made "in anticipation of mass workforce reductions in September." On Thursday, however, the company backtracked and announced that "no layoffs are contemplated or expected at this time."

New layoffs would mark the latest setback for domestic coal producers, which in recent years have been largely decimated by increased competition from natural gas. St. Louis-based coal giants Peabody Energy and Arch Coal, for instance, each filed for bankruptcy earlier this year.

The plight of the industry is readily apparent in Southern Illinois, where local mines have already absorbed several rounds of job losses. Pamela Barbee, the executive director of a job training organization in 14 Southern Illinois counties, says her agency is aware of the loss of 750 local coal jobs in the last year.

The trend is even more dramatic on a broader timescale. Phil Gonet, president of the Illinois Coal Association, says that the state employed about 4,500 coal workers at the start of 2015, but is now down to roughly 3,000. As recently as 1990, the industry employed around 10,000 workers in the state. But Gonet says federal clean air amendments signed that year put Illinois' high-sulfur coal at a fatal disadvantage.

"Unfortunately for Illinois, most of the power plants in Illinois decided to switch fuels to coal from Wyoming," Gonet said. "Its sulfur content is so low that power plants didn't need (to invest in) scrubbers to continue operating."

The New Era and New Future mines near Galatia are both underground, longwall coal mines. Industry experts say that mines like those are generally more cost-effective, meaning they could be more resilient as the industry continues to try to find footing amid harsh market conditions.

"In general, longwall mines, once they're in production, are more productive," Gonet said. "If you're in a shrinking market, you want to be a low-cost producer."

The Associated Press contributed to this report.

Bryce Gray --314-340-8307 @_BryceGray on Twitter [email protected]

Bryce Gray --314-340-8307

@_BryceGray on Twitter

[email protected]

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