View:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 8, 1999
Arch Coal, Inc.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-13105 43-0921172
------------------ ---------------- ------------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation Number) Identification No.)
CityPlace One, Suite 300, St. Louis, Missouri 63141
----------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (314) 994-2700
Page 1 of 4 pages.
Exhibit Index begins on page 4.
Item 5. Other Events.
On March 8, 1999, Arch Coal, Inc. (the "Company") announced its plans to
shut down its Hobet Mining subsidiary's Dal-Tex mine in Logan County, West
Virginia. A copy of the Company's press release dated March 8, 1999 is attached
hereto and incorporated herein by reference in its entirety.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) The following Exhibit is filed with this Current Report
on Form 8-K:
Exhibit No. Description
----------- -----------
99 Press Release dated as of March 8, 1999
Page 2 of 4 pages.
Exhibit Index begins on page 4.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 9, 1999 ARCH COAL, INC.
By: /s/ Jeffry N. Quinn
-----------------------------
Jeffry N. Quinn
Senior Vice President -
Law & Human Resources,
Secretary and General Counsel
Page 3 of 4 pages.
Exhibit Index begins on page 4.
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
99 Press Release dated as of March 8, 1999
Page 4 of 4 pages.
Exhibit 99
Arch Coal Announces Plans to Shut Down its Dal-Tex Mine
ST. LOUIS, March 8 -- Arch Coal, Inc. (NYSE: ACI - news) announced Monday
its plans to shut down its Hobet Mining subsidiary's Dal-Tex mine in Logan
County, West Virginia. The decision follows the March 3, 1999, order by U.S.
District Court enjoining federal and state agencies from issuing any permits for
mining at the company's proposed Spruce Fork surface coal mine adjacent to the
existing Dal-Tex operations. Without permits to move into the new reserves, the
Dal-Tex mine, which has mined all of its currently permitted economic reserves,
is being forced to shut down.
"This is one of the most painful decisions I have ever had to make," said
Steven F. Leer, President and CEO of Arch Coal, Inc. "We repeatedly pointed out
that the delay in granting these permits would lead to very negative results for
Dal-Tex employees, their families, the citizens of Logan County and the
surrounding area, and the mine. Unfortunately, the court's order leaves us no
other option than to commence the shutdown of Dal-Tex. As a practical matter,
Dal-Tex probably should have begun an orderly shutdown several months ago
because we had mined out virtually all of the economically recoverable reserves
from the existing permitted area. However, we kept the equipment running, even
while we were losing over $1 million per month, knowing that this permit met all
of the detailed requirements of the federal and state regulatory agencies, and
we had expected a favorable ruling."
"I want our employees, our suppliers and those citizens of West Virginia
who supported our efforts to be aware of how grateful we are for their support.
We deeply regret the actions that commenced today. It is difficult to accept
that the plaintiffs and the court can dismiss the personal hardships to be
suffered by so many good hardworking West Virginians as 'purely temporary
economic harms.' The plaintiffs are unilaterally trying to rewrite the 1977
Surface Mining Control and Reclamation Act and change the manner in which it has
been interpreted by federal and state regulatory agencies over the past 22
years. We feel it is truly incredible that a mining process that has been
practiced successfully in West Virginia since 1977 without any indication of
negative long-term environmental impact has suddenly been deemed unfit for
continuation."
"Arch Coal will aggressively pursue all available legal options to reverse
the court's decision and obtain the necessary permits for the development of the
Spruce Fork mine," Leer continued. "Realistically, however, the time required
for this process will mean that the development of Spruce Fork will likely be
delayed for several years, and any future decision concerning the commencement
of mining at the site will be influenced by market conditions at that time.
Furthermore, any coal company -- Arch included -- will have to think long and
hard before investing additional capital in such an uncertain environment."
In total, nearly 300 direct mining jobs will likely be eliminated at
Dal-Tex in the next four months. The company reported that 30 miners were laid
off today, and that approximately 200 additional miners at the company's surface
mine and coal preparation plant would lose their jobs in mid-July. In addition,
the roughly 50 employees at Dal-Tex's Adkins Fork deep mine will likely lose
their jobs in mid-July as well. As with many other deep mines in the state,
Adkins Fork provides coal for blending with lower-cost surface mine production
and is simply not economic long-term as a stand-alone operation. By early August
1999 the only miners likely to remain employed at Dal-Tex will be approximately
50 personnel needed for mine reclamation.
But Arch Coal and the employees at Dal-Tex are not the only ones who have
been harmed by the plaintiffs' actions and the court's decision. In 1998, the
Dal-Tex complex paid nearly $48 million to West Virginia businesses for a wide
range of materials and services. With the Dal-Tex complex idled, many of these
businesses may be forced to reduce their work forces and some may even shut
down. In addition, state tax revenues will be reduced which could lead to
reduced services or higher taxes for other West Virginia citizens and
businesses. Last year, $6.2 million in taxes directly attributable to the
Dal-Tex operation were paid to the state of West Virginia. (That total does not
include personal income taxes paid by Dal-Tex employees.) It's also important to
note that economists believe that five to eight indirect jobs are created by
every direct mining job, which means that the actions of the plaintiffs and the
court will likely have repercussions far beyond the nearly 300 direct jobs that
will be eliminated at Dal-Tex.
Arch's decision to begin layoffs dictates that it also redeploy its
equipment. One of the large Dal-Tex shovels and its associated trucks and
support equipment will likely be shipped to Arch's Black Thunder mine near
Gillette, Wyoming. The second shovel and its associated trucks and other support
equipment, will be moved to another of Arch's West Virginia surface mines. Arch
officials further indicated that they are evaluating the possibility of
disassembling the Marion 8200 dragline and moving it to Wyoming, but that a
final decision will not be made until an examination of the company's long-term
options at Spruce Fork are completed. Additional equipment will be moved to
various Arch mines around the U.S. as those mines require additions or
replacements. All of Arch's sales obligations will be met from other Arch
locations.
Leer further commented, "We deeply regret the impact that the actions of
the plaintiffs and the court will have on our employees and the citizens of
Logan County and the surrounding area. Throughout the turbulence of the past
year we have taken every possible step to demonstrate our compliance with the
law. All relevant Federal agencies, including EPA and the Corps of Engineers, as
well as the West Virginia Department of Environmental Protection concluded that
our permit application fully complied with all applicable law. In fact, the West
Virginia DEP testified that our application was one of the most detailed and
well engineered applications ever submitted. Unfortunately the plaintiffs have
constantly refused to accept our efforts. We can only conclude that they simply
do not want to see surface coal mining -- and, quite likely, any mining
whatsoever -- occur in West Virginia. The prohibition of surface mining would
almost certainly 'plunge the state into economic depression,' to quote the
Governor's task force on mountaintop mining."
During 1998, Dal-Tex accounted for 6.7% of Arch's revenues and the mine's
operating losses reduced Arch's operating profits by 6.8%. Arch Coal is the
nation's second largest coal producer, with subsidiary operations in West
Virginia, Kentucky, Virginia, Illinois, Wyoming, Colorado and Utah. Through
these operations, Arch Coal provides the fuel for approximately 6% of the
electricity generated in the United States.