PRESTONSBURG — A "dramatic market downturn" attributed to the COVID-19 pandemic led a coal mining company to announce the termination of 182 coal miners in Floyd County this week, leading local officials to express concern about those employees and the impact this closure will have on the county's budget.
The Kentucky Career Center reports that it received a WARN notice from Redhawk Mining on Monday, May 11. Redhawk is an affiliate of Blackhawk Mining, a Lexington-based company that was approved to receive reorganization through Chapter 11 bankruptcy in 2019.
The coal company, citing "unforeseen business circumstances" caused by the COVID-19 pandemic, reported that it plans to idle its Spurlock Complex, including the Redhawk #1 underground mine, Redhawk Belt Transfer, Spurlock Preparation Plant, Spurlock BH#2 and support and administration officials in Printer, as well as the Redhawk #7 mining in Banner.
The company plans to reduce the workforce at these location on May 14 or within 14 days of that date.
"This notice is being given as soon as practicable, but due (to) the unforeseen business circumstances caused by the COVID-19 pandemic, additional notice was not feasible," Kevin T. Varney, vice president of operations, wrote in a letter to the Kentucky Career Center and local officials. "We expect that approximately 182 non-represented employees at the Operations will be terminated.”
He reported that the pandemic has caused "unanticipated and dramatic market downturn and a sudden decline in customer orders."
The layoff impacts 22 roof bolters, 10 scoop operators, 16 shuttle car operators, 10 foreman, 13 move crew members, 12 electricians, 11 miner operators, nine belt men, eight belt examiner and others who work at the facilities that are being idled.
Floyd County Judge-Executive Robbie Williams said these layoffs are permanent.
"It looks like it's going to be more than a layoff," he said. ”It's my understanding these guys are terminated. In the WARN notice that we received, it's termination. They're telling us that it's going to be at least 2021 before they do anything. There's just no markets right now. They're telling us that it looks like it's going to be, at a very minimum, into next year before they do go back to work, if they go back to work. If this market doesn't change, there's a possibility they may not even open back up."
Last week the fiscal court met in special session to request a draw down of $300,000 in coal severance funds from the state — actions Williams said the county preemptively took in light of revenue shortfalls in the state budget. This closure will impact the county's coal severance allotment significantly, he reported.
"That's about 75 percent of our coal severance, and our coal severance is what funds our senior programs," he said. "So, it's very concerning to me because, through our seniors programs, I mean, just since COVID-19 hit, we've fed over 12,000 people through that program. In the last 60 days, 12,000 meals. So, yes, it's concerning. There'll definitely have to be some adjustments and some things happen here in the near future."
Williams said on May 12 that he is planning to meet with the county treasurer to talk about the county budget. He reported that the state projected that Floyd County would receive around $670,000 in coal severance, but he said that estimate was based on previous production estimates and did not anticipate this closure. He expects the county coal severance to drop to around $200,000.
Williams also voiced concerns about the employees who lost their jobs this week, saying that Floyd County officials are working to find ways to keep them in the region instead of moving out of the area for work.
"We doing what we can to try to help the folks and the families that have been affected," he said. "We are out here every day, trying to bring new businesses into Floyd County. I met with a guy last week, he helps brings businesses into different regions, and we're actually talking to another company about trying to get a couple hundred jobs up to the industrial park. So, we're doing what we can to try to help these folks. We want to keep our guys local. We don't want them leaving, going to Lexington, and leaving this area. We want them here and we're going to do what we can to retain and keep them here."
He also said, "It's not just the loss of people. It's just, you know, these are good, hard-working families that are part of our community, that we see every day. Anytime someone has to pack up and leave their home to go make a living somewhere else, it's not good for us because they're part of our community, and it's not good for them because they're having to pack up and leave the life the they know."
Organizations like the East Kentucky Concentrate Employment Program offer programs to retrain coal miners in other fields, working with Big Sandy Community and Technical College and other agencies. Williams encourages these coal miners to check into what EKCEP and other programs have to offer.
"We're doing what we can on our end and, obviously, there's programs out there for retraining," Williams said. "We know it's coming sooner rather than later, this — you know, fossil fuels is slowly disappearing, but it's never easy when you have folks lose jobs, especially your neighbors and friends.”