Arch's subsidiaries will close three higher-cost thermal mining complexes and associated preparation plants, temporarily idle Hazard's Flint Ridge complex and curtail production at other operations in Kentucky, Virginia and West Virginia. The mine locations affected by the announced closings are the East Kentucky, Eastern and Knott County complexes. For FY12, Arch expects average cash costs in Appalachia, excluding severance and related costs, to remain in the range of $68 per ton to $73 per ton.
Moreover, these actions will reduce Arch's thermal coal production by more than 3M tons annually. However, Arch continues to expect thermal coal sales volume in the range of 128M to 134M tons for 2012. The company also plans to realize savings on future capital spending due to the idling of several operations and the redeployment of equipment into other active operations. Arch estimates future reductions in annual capital expenditures in the range of $30M to $40M.