Union-represented workers went on strike at three Foundation Coal Holdings Inc mines in Pennsylvania and Illinois on Wednesday in the first major strike against the coal mining industry in 13 years.
The company immediately responded by announcing it would permanently shut one of the mines - Wabash, in southern Illinois -but left open the possibility of talks with the union over the mine's future.
However, no new talks were scheduled for Wednesday to try and resolve the dispute over new labour contracts at the three affected mines, which employ roughly 1,250 union workers. Meanwhile, analysts said that unless the strike was protracted, it was unlikely to have a big short-term effect on shipments to power plants. But, if it lasted more than few days, it could boost coal prices.
Wall Street appeared unconcerned and Foundation Coal stock rose 80 cents, or 2.35 percent, to $34.84 in afternoon trading on the New York Stock Exchange. Negotiators from Foundation Coal and the United Mine Workers of America had met at a secret location in Pennsylvania on Tuesday but failed to make a breakthrough by the midnight strike deadline.
"We went on strike on 12:01 (EDT) this morning," UMWA spokesman Phil Smith told Reuters. "We're prepared to go as long as it takes." Smith said the union remained willing to negotiate, adding it has a $16 million strike fund to compensate members.
The work stoppage, the first major strike at a US coal mine since 1994, hit the Cumberland and Emerald mines in Waynesburg, Pennsylvania and Wabash in Keensburg, Illinois, which together sold 15.4 million tons of coal in 2005.
The sticking point in talks has been Wabash, which lost $26 million last year. The company has said the three mines must be treated as separate units with separate contracts, while the UMWA wants the three mines to sign an umbrella contract under its national agreement.
"Collective bargaining...has not resulted in a mutually acceptable new labor contract," said Linthicum Heights, Maryland-based Foundation, which operates 14 mines and produces approximately 72 million tons of coal per year. "The decision to close a mine, particularly one as long-lived as Wabash, is never easy," said Jeffrey Kukura, president of the subsidiary that operates the mine.
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