Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 1, 1995 TAG: 9508010064
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
Westmoreland also said it had reached an agreement with Duke Power Co. for the Charlotte, N.C.-based electric utility to buy out the remaining term of a coal-supply contract with Westmoreland for $23 million. Westmoreland supplied coal under the agreement from its Virginia division.
Because Duke was the only customer receiving coal from Westmoreland's Virginia division's mines, Westmoreland said it was idling the division and the Pine Branch Mining Co.
Sam Church, a United Mine Workers official and member of the Wise County Board of Supervisors, said the idling of the mines effective Monday will affect roughly 600 union workers, about one-fourth of the union's membership in Virginia.
It's not welcome news for an area where the unemployment rate already is more than 10 percent, Church said. Westmoreland plans to pay the idled workers through Aug. 23, he said.
Church said Westmoreland has good coal reserves and good facilities in Virginia and he's not expecting Massey to buy the company to shut it down. He is worried, though, the new owners might try to operate with fewer workers, Church said.
Westmoreland said in a statement that idling the division would require the company to recognize certain liabilities for accounting purposes and the impact on shareholders' equity could prevent the payment of preferred dividends, possibly as early as Oct. 1.
At Westmoreland's annual shareholders' meeting in June, company President Christopher Seglem said the Philadelphia-based company no longer could tolerate the losses at its Virginia Division.
by CNB