Newspaper article St Louis Post-Dispatch (MO)

611 Could Lose Jobs at Mine in Illinois Cyprus Amax May Close Wabash, Sell Contract to Another Firm

Newspaper article St Louis Post-Dispatch (MO)

611 Could Lose Jobs at Mine in Illinois Cyprus Amax May Close Wabash, Sell Contract to Another Firm

Article excerpt

One of Illinois' biggest coal mines may shut down in 60 days, costing the jobs of 611 people.

The owner, Cyprus Amax Minerals Corp., says it can make more money selling the Wabash Mine's customer contract to another mining company.

Cyprus Amax held out some hope of keeping open the mine in Keensburg, 140 miles east of St. Louis. But even if the mine remains open, most workers will lose their jobs because Cyprus Amax will cut production sharply. The decision announced late Monday represents another major blow to Illinois' sagging coal industry. In the last 10 years, annual production has dropped by 20 percent to an estimated 48.8 million tons. Employment has plunged by 61 percent to 4,794. "Wabash was a high-cost mine," D. Michael Rounds, a spokesman for Cyprus Amax, said Tuesday. "We tried to get productivity up. We tried to get costs down. It hasn't happened." He wouldn't discuss details of the problems. The Wabash Mine has plenty of reserves, and it is under contract to an Indiana utility to provide 3.6 million tons a year until 2010. Two years ago, Cyprus Amax and the utility renegotiated their contract, reducing the price per ton and extending the contract by eight years. The mine has been supplying coal since 1974 to PSI Energy in Evansville, Ind. The mine's sole customer is PSI's power plant near Princeton, Ind. Cyprus Amax, based in Englewood, Colo., decided to take advantage of a clause in its contract, letting it sell its supply contract to another company. Cyprus Amax wouldn't identify the company or discuss the contract's price. Cyprus Amax noted that the two parties had only signed a preliminary agreement. Many coal industry observers believe Cyprus Amax is selling its supply contract to a nonunion company. "We knew the contract was in play for quite some time," said Joe Angleton, president of the United Mine Workers of America (UMWA) district that includes Illinois. …

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