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Coronavirus in Oklahoma: Alliance Resource Partners shuts coal mines after seeing slump in demand for energy

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TULSA — Alliance Resource Partners is temporarily closing coal mines in Illinois, Indiana and western Kentucky in response to a “crushed demand for energy.”

The company announced Monday its board suspended a planned cash distribution to unitholders for the quarter ending Tuesday and that the company has withdrawn previously issued guidance for its current fiscal year.

Officials said the company plans to issue new guidance in May.

"It is important to note that approximately 75% of our domestic sales are targeted to states that depend on coal, more than any other fuel, to generate electricity," Joseph W. Craft III, the company's CEO, stated as part of the announcement.

"As serious as the disruption caused by the virus has been to the citizens of these states, imagine the impact if our miners didn’t show up every day to ensure the reliable supply of this essential fuel necessary to keep the lights on," Craft said. "We remain in constant contact with our customers and stand ready to meet their needs for this essential fuel."

Craft attributed declines in demand for coal-based energy to the economic slowdown caused by the pandemic.

“The unprecedented decision by world leaders to lockdown the global economy to combat the deadly virus has crushed demand for energy,” its release states. "All Americans are having to adjust to a way of life none of us could have imagined two months ago.”

Craft stated the company has been working at reduced levels the past six weeks while evaluating its customers' needs.

He noted the company’s coal operations closures, impacting mines that pull coal from the Illinois Basin, are expected to continue through April 15 but could change based on the fluid economic situation.

“As the year progresses, coal production at all of our operations will be further modified to match existing sales commitments of approximately 28 million tons for 2020,” the release continued, adding that the company will do what it can for now to optimize its cash flows through numerous initiatives to reduce costs, expenses, working capital and capital expenditures.

"Although we are suspending formal guidance, we currently anticipate ARLP's total sales tons for 2020 will be approximately 25% below our initial expectations,” Craft stated.

Craft said the company’s highest priorities are to safeguard the health and safety of its workers and to support communities impacted by its operational curtailments.

“We are all in this together. We will get through this and be stronger for it," Craft stated.

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Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›