A metallurgical coal mining company will lay off 118 people in Buchanan County in December and “hot idle” its operations there because of a downturn in the coal market, officials said.
Grundy-based Wellmore Energy Co.’s job reductions come just a few months after it said it would lay off 72 people in the county. Those cuts were set to take effect by mid-October.
Wellmore is a subsidiary of Johnson City, Tennessee-based United Coal Co., which is the North American subsidiary of the Ukrainian coal and steel firm Metinvest. Metinvest is considering selling United Coal.
Paul Konstanty, vice president and general counsel for United Coal, said Tuesday in a statement to Cardinal News that the metallurgical coal market has been “challenging” for all U.S. coal operators over the past 16 months. Metallurgical coal, also known as met coal or coking coal, is used in making steel.
Konstanty said United Coal and Wellmore “have taken intentional steps to preserve our most valuable assets, our dedicated employees.”
“Unfortunately, after such a prolonged market downturn, United Coal Company had to make the difficult decision to idle our operations in Southwest Virginia. The operations remain on ‘hot idle’ in an effort to be prepared when the metallurgical coal market improves,” Konstanty said.
“Hot idle” is when production has been suspended but equipment is maintained in anticipation of the company resuming work.
It’s unclear how many employees will remain at Wellmore after the latest round of layoffs. The company was set to employ 171 people after the earlier round of 72 job cuts. Assuming no other changes in employment levels, a reduction of another 118 would lower that figure to 53.
Wellmore’s facilities include company-owned underground and surface mines, contract mines, shops, preparation plants and rail-loading facilities.
Wellmore sent letters, dated Oct. 6, notifying the state’s workforce agency, Virginia Works, of the layoffs. The letters were to comply with the Worker Adjustment and Retraining Notification, or WARN, Act, which requires employers to provide advance notice of mass layoffs. Virginia Works recently updated its online WARN notice listing to reflect the Wellmore layoffs.
According to the letters, the layoffs will begin Dec. 6 and be finalized by Dec. 19. They will affect:
- 95 employees at Wellmore’s Paw Paw 2 South mine in Big Rock,
- 12 employees at the preparation plant at that location,
- eight employees at Wellmore’s administrative operations in Grundy,
- two employees at the surface minerals operation in Grundy, and
- one employee at the Elk Creek surface mine in Hurley.
The company said it expects the cuts to be permanent and that the employees are not represented by a union.
In 2023, Wellmore announced it would lay off 135 employees in Buchanan County.The cuts come as domestic production of all types of coal has declined over the past two decades, according to the U.S. Energy Information Administration.