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Less Demand Forces Mine Consolidation

Posted on: Friday, 31 March 2006, 12:00 CST

By Karen Binder, The News-Gazette, Champaign-Urbana, Ill.

Mar. 30--CATLIN At least 90 coal miners will be displaced when Black Beauty Coal Co.'s Riola Mine Complex operations "consolidate" in late May with its younger sister portal, Vermilion Grove.

"Lower market demand" by its industrial and utility customers is driving the Riola underground portal's closing, one mine official said Wednesday. Coal giant Peabody Energy of St. Louis is co-owner of the Riola Complex mines, along with Evansville, Ind.-based Black Beauty Coal.

"We're not exactly closing the Riola mine," said Peabody spokeswoman Beth Sutton. "We're planning to consolidate Riola production into Vermilion Grove's operations this summer."

The consolidation will require suspending Riola's mining functions and closing the mine, Sutton explained. Opened in 1995, Riola produced 1.6 million tons of coal while Vermilion Grove, started in 2001, yielded 1.3 million tons in 2004, Illinois coal statistics state.

The move will scale back production "to match customer demand," Sutton said.

What this means for the 90 full-time Riola workers is that they will get an offer to transfer into openings at Vermilion Grove or any Black Beauty mine, Sutton said. Black Beauty operates six mines in Indiana and four in Illinois.

The mines' work force was told about the closing during employee meetings in late February, in order to allow them time to make their own plans, Sutton said. The mines are not represented by a union.

"We have a terrific work force who are very skilled and key to our commitment to safety and productivity," she added.

It also appears that the consolidation does not qualify as a mass layoff, because the workers are being offered positions within the company.

Federal law requires notification within 60 days of layoffs affecting 50 or more employees. The Warren Act also requires notification to state employment offices.

Although the Illinois Department of Employment Security Danville office has not received a layoff notice, management there said its staff is prepared to help by explaining unemployment qualifications as well as any available job training program.

It is not clear what the impact of Riola's closing will have on the county economy. Vicki Haugen, CEO and president of the county's economic development agency, Vermilion Advantage, could not comment on the matter, at the request of Black Beauty officials.

However, one thing that Haugen did comment about last July when a coal transfer station was announced for Northgate Industrial Park in Danville was her concern for the mine complex's ability to stay open.

The transfer station is essentially a railroad gateway to ship in cheaper, cleaner Western coal to be trucked for area users, especially Dynegy's Collison power plant west of Danville.

"That was one of our tougher decisions with this (coal transfer station) project. There are the mines or we could lose the power plant," Haugen said at the time.

The county's coal history peaked in the 1890s when 54 mines operated largely in the south county region. Come May, the Vermilion Grove mine becomes its last.

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Copyright (c) 2006, The News-Gazette, Champaign-Urbana, Ill.

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DYN,

Source: The News-Gazette

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