Walter Energy Provides Update on Production Curtailment at Willow Creek Mine
Walter J. Scheller III, Chief Executive Officer of Walter Energy, Inc.
(NYSE: WLT) (TSX: WLT), today provided an update on the Company′s
decision to curtail production at its Willow Creek mine.
'Over the past 18 months, since I became CEO, one of my key priorities
has been aggressive operational management,? Mr. Scheller said. 'While
it is never easy to curtail operations at a facility, our commitment to
idle operations where necessary is central to the Company′s operating
plan. This plan has been developed with the full support of our Board.
'We greatly regret the impact this decision will have on many of our
dedicated employees,? Mr. Scheller continued. 'I would like to commend
them for their work in significantly improving our productivity and
costs at the mine over the past year.
'The current price environment for met coal dictated that we curtail
production at Willow Creek in order to ensure we generate a sufficient
economic return in mining the high quality met coal reserves at the
site. Given the tremendous progress that has been made in the cost
structure at the mine, when we see signs of sustainable market pricing
conditions we would expect to ramp up production,? Mr. Scheller
concluded.
The mine, which will be curtailed in April, currently employs
approximately 350 employees, of which approximately 250 will be affected
by the decision to curtail production. The Willow Creek mine will
continue with limited operations to support Walter Energy′s Brule mine.
Willow Creek is the fifth mine Walter Energy has announced plans to
curtail or idle as part of its initiatives to address underperforming
assets. Last week the Company said it was accelerating the closure of
its North River underground mine in Alabama. In addition, the Company
has also idled the Aberpergwm mine in South Wales and the Gauley Eagle
underground and surface mines in West Virginia, and has curtailed
production at its Maple underground mine, also in West Virginia.
As previously disclosed, the Company expects to record a one-time cash
charge of approximately $7.5 million in severance costs in connection
with its curtailing production of the Willow Creek operations. The
Company currently expects that full year 2013 metallurgical coal
production will be in line with production levels in 2012.
The Willow Creek surface mine, located near the town of Chetwynd in
Northeast British Columbia, produces metallurgical coal with production
plans of one third hard coking coal and two thirds low-volatile PCI coal
over the mine's expected 20-year life. The Willow Creek mine had
approximately 19.0 million metric tons of recoverable coal reserves as
of December ?31, 2012.
About Walter Energy
Walter Energy is a leading, publicly traded 'pure-play' metallurgical
coal producer for the global steel industry with strategic access to
high-growth steel markets in Asia, South America and Europe. The Company
also produces thermal coal, anthracite, metallurgical coke and coal bed
methane gas. Walter Energy employs approximately 4,100 employees and
contractors with operations in the United States, Canada and United
Kingdom. For more information about Walter Energy, please visit www.walterenergy.com.
Safe Harbor Statement
Except for historical information contained herein, the statements in
this release are forward-looking and made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and
may involve a number of risks and uncertainties. Forward-looking
statements are based on information available to management at the time,
and they involve judgments and estimates. Forward-looking statements
include expressions such as 'believe,' 'anticipate,' 'expect,'
'estimate,' 'intend,' 'may,' 'plan,' 'predict,' 'will,' and similar
terms and expressions. These forward-looking statements are made based
on expectations and beliefs concerning future events affecting us and
are subject to various risks, uncertainties and factors relating to our
operations and business environment, all of which are difficult to
predict and many of which are beyond our control, that could cause our
actual results to differ materially from those matters expressed in or
implied by these forward-looking statements. The following factors are
among those that may cause actual results to differ materially from our
forward-looking statements: unfavorable economic, financial and business
conditions; the global economic crisis; market conditions beyond our
control; prolonged decline in the price of coal; decline in global coal
or steel demand; prolonged or dramatic shortages or difficulties in coal
production; our customer's refusal to honor or renew contracts; our
ability to collect payments from our customers; inherent risks in coal
mining such as weather patterns and conditions affecting production,
geological conditions, equipment failure and other operational risks
associated with mining; title defects preventing us from (or resulting
in additional costs for) mining our mineral interests; concentration of
our mining operations in limited number of areas; a significant
reduction of, or loss of purchases by, our largest customers;
unavailability of cost-effective transportation for our coal;
availability, performance and costs of railroad, barge, truck and other
transportation; disruptions or delays at the port facilities we use;
risks associated with our reclamation and mine closure obligations,
including failure to obtain or renew surety bonds; significant increase
in competitive pressures and foreign currency fluctuations; significant
cost increases and delays in the delivery of raw materials, mining
equipment and purchased components; availability of adequate skilled
employees and other labor relations matters; inaccuracies in our
estimates of our coal reserves; estimates concerning economically
recoverable coal reserves; greater than anticipated costs incurred for
compliance with environmental liabilities or limitations on our
abilities to produce or sell coal; our ability to attract and retain key
personnel; future regulations that increase our costs or limit our
ability to produce coal; new laws and regulations to reduce greenhouse
gas emissions that impact the demand for our coal reserves; adverse
rulings in current or future litigation; inability to access needed
capital; events beyond our control may result in an event of default
under one or more of our debt instruments; availability of licenses,
permits, and other authorizations may be subject to challenges; risks
associated with our reclamation and mine closure obligations; failure to
meet project development and expansion targets; risks associated with
operating in foreign jurisdictions; risks related to our indebtedness
and our ability to generate cash for our financial obligations;
downgrade in our credit rating; our ability to identify suitable
acquisition candidates to promote growth; our ability to successfully
integrate acquisitions; our exposure to indemnification obligations;
volatility in the price of our common stock; our ability to pay regular
dividends to stockholders; costs related to our post-retirement benefit
obligations and workers' compensation obligations; our exposure to
litigation; and other risks and uncertainties including those described
in our filings with the SEC. Forward-looking statements made by us in
this release, or elsewhere, speak only as of the date on which the
statements were made. You are advised to read the risk factors in our
most recently filed Annual Report on Form 10-K and subsequent filings
with the SEC, which are available on our website at www.walterenergy.com
and on the SEC's website at www.sec.gov.
New risks and uncertainties arise from time to time, and it is
impossible for us to predict these events or how they may affect us or
our anticipated results. We have no duty to, and do not intend to,
update or revise the forward-looking statements in this release, except
as may be required by law. In light of these risks and uncertainties,
readers should keep in mind that any forward-looking statement made in
this press release may not occur. All data presented herein is as of the
date of this release unless otherwise noted.
Important Additional Information
On March 8, 2013, Walter Energy filed with the Securities and Exchange
Commission ('SEC?), a definitive proxy statement (as it may be amended
or supplemented, the 'Proxy Statement?) concerning the proposals to be
presented at Walter Energy′s 2013 Annual Meeting of Stockholders in
connection with the solicitation of proxies from Walter Energy′s
stockholders. The Proxy Statement contains important information about
Walter Energy and the 2013 Annual Meeting. In addition, Walter Energy
files annual, quarterly and special reports, proxy statements and other
information with the SEC. INVESTORS AND STOCKHOLDERS ARE STRONGLY
URGED TO READ THE PROXY STATEMENT AND ACCOMPANYING PROXY CARD AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE
THEY CONTAIN IMPORTANT INFORMATION ABOUT WALTER ENERGY AND THE PROPOSALS
TO BE PRESENTED AT THE 2013 ANNUAL MEETING. These documents are
available free of charge at the SEC′s website (www.sec.gov)
or from Walter Energy at our investor relations website (www.investorrelations.walterenergy.com).
The contents of the websites referenced herein are not deemed to be
incorporated by reference into the Proxy Statement.
Certain Information Regarding Participants
Walter Energy, its directors and certain of its officers may be deemed
to be participants in the solicitation of Walter Energy′s stockholders
in connection with its 2013 Annual Meeting. Information regarding the
names, affiliations and direct and indirect interests (by security
holdings or otherwise) of these persons is found in the Proxy Statement
for the 2013 Annual Meeting, which is filed with the SEC. Additional
information regarding these persons can also be found in other documents
filed by Walter Energy with the SEC. Stockholders are able to obtain a
free copy of the Proxy Statement and other documents filed by Walter
Energy with the SEC from the sources listed above.
For Walter Energy, Inc.
For media:
Ruth Pachman,
212-521-4891
ruth-pachman@kekst.com
or
Walter
Energy, Inc.
For investors:
Mark Tubb, 205-745-2627
mark.tubb@walterenergy.com