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West Virginia

February 1, 2014

Murray Energy chief predicts more job cuts in coal industry

CHARLESTON — Robert “Bob” Murray, the head of Murray Energy Corp., said Central Appalachian coal production is down 43 percent from 2008 levels – along with a reduction in jobs – and he predicts more declines.

“I don’t think there is any question we will continue to see decreases in employment in the coal industry in West Virginia as a result of the actions of President Barack Obama, his radical appointees – mostly from the environmental movements – and his political supporters,” Murray said in an interview for the West Virginia Press Association.

Murray said some university studies show that every coal mining job creates up to 11 related jobs, “so you’re talking about a huge impact on the state and our communities.

“I look for the 43 percent to increase as more and more regulations are enacted by the Obama administration,” he said. “He has so far closed 392 coal-fired power plants in the United States – that’s a loss of about 100,000 megawatts of electricity.

“It’s a human issue to me because I know the names of these miners whose jobs and family livelihoods are being destroyed,” Murray said. “If they own anything, it’s their homes, and when the jobs are eliminated in their communities, there is no one to sell their homes to. These are people who want to work in honor and dignity and they’re being denied that. These are my employees.

“This is not the America that I cherish.”

Murray is chairman, president and chief executive officer of St. Clairsville, Ohio-based Murray Energy Corp. With the Dec. 5 purchase of Consol’s Shoemaker Mine in Ohio County, McElroy Mine in Marshall County, Loveridge Mine in Marion County, Robinson Run Mine in Harrison County and Blacksville Mine in Monongalia County, Murray Energy became the fifth largest coal producer in the United States. The deal was valued at $3.5 billion.

Murray Energy now has 7,100 employees and operates a total of 13 active mines in West Virginia, Ohio, Illinois, Kentucky and Utah.

In October, after Murray’s purchase of the five Consol mines was announced, U.S. Sen. Joe Manchin said in a prepared statement, “Throughout the many years that I’ve worked with Consol Energy, they have always been an industry leader in mine safety as well as a community-minded company that has continued to reach out to our hardworking miners and their families. I have looked to Consol to set the gold corporate standard in mining conditions, and I can only hope that Murray Energy will follow in Consol’s footsteps to put our miners first.”

Consol has mined coal for more than 100 years, has been through many tragedies, and has survived numerous boom-and-bust market cycles. As a publicly traded company, Consol is somewhat transparent.

Murray Energy was established in 1988. It has endured a major tragedy: two collapses in its Crandall Canyon Mine near Huntington, Utah, in 2007, resulted in the deaths of six miners and three rescuers. Murray Energy also has endured market ups and downs. Instead of a corporate culture, the company is privately held, built in large measure around Murray’s entrepreneurial drive and savvy.

Prior to the Consol deal, most of Murray’s mines were non-union. Hourly workers at the Consol mines he acquired are represented by the United Mine Workers of America union.

Regarding safety, Murray was asked if miners and the public should have more trust in his company than Consol and if so, why.

“Safety? Our only subject is safety!” he said. “We don’t say, ‘Our first priority is safety.’ It is the only subject I talk about when I’m talking about safety. When I’m done talking about safety, I’ll talk about something else.

“We are well-recognized for our fire protection and emergency preparedness,” he said. “We have programs not mandated by any laws to protect the safety of our employees from mine fires. We have fire brigades that we train – hundreds of miners on each shift of every day in the mine. We spend millions of dollars on firefighting equipment that is not required by any law.

“The reason is I’m terrified by mine fires. I got caught in one, succumbed, and was saved. I was caught in another one and got out. And I’ve been present in two mines where there were explosions or mine fires. So I am terrified of mine fires.

“We have special trucks with mazes where men practice by putting out artificial smoke. We have millions of dollars of special equipment, fire stations underground. And again, the training is well beyond what the fire department would train. These people are pros and they’re on each shift. If we have a fire, they go to the fire and put it out. We’re recognized worldwide for what we do here. It is coal mining and there are many hazards. But I say to every young person I bring into the mines, ‘No pound of coal is worth getting hurt over.’”

Murray said one of his arms works well but, because of an injury, the other doesn’t; his neck has been broken three times and “looks like a birdcage inside”; he’s had a broken hip and a broken foot. “I really hurt,” he said. “I don’t want them to feel the way I do when they get my age.

“Our commitment to safety is total but it is coal mining. Most accidents we have are caused by the individual themselves, by doing some thoughtless thing for just a moment. So we emphasize task training, so they’re focused on how they go about their job so they don’t get hurt.

“Consol is a wonderful company,” he said. “I think they’ve done a very good job with their emphasis on safety. Our approach has the same emphasis but it’s different. We believe in extensive task training and discipline, more so than additional rules. If you get yourself hurt, you will be disciplined because we don’t want anybody hurt.”

Murray said he’s been going in underground mines for 57 years and continues to do so.

“I’ve done it enough years to know you’ve got to keep safety in the mind of the guy every minute,” he said. “Additional rules won’t do that but task training will.

“I live in fear every day that we’ll have some kind of accident that will result in the injury of someone. I take it to bed every night. I wake up with it every morning. It goes with our industry. But we’ve got to keep working at doing everything possible to protect the safety and health of our miners.”

Murray said his company expects to produce about 65 million tons of coal this year and has reserves of about 3 billion saleable tons.

All of the company’s production is thermal or steam coal, used to produce electricity. “I do have some metallurgical coal reserves in Pennsylvania we’re not mining right now,” he said, referring to coal used to make steel.

When Murray and Consol announced their deal in October, Robert Moore, executive vice president, chief operating officer and chief financial officer of Murray, said in a prepared statement, “With our expertise, we will be able to efficiently operate the acquired Consolidation Coal mines and provide their employees with an opportunity for long-term employment.”

The interview with Murray came after he delivered a keynote speech to about 500 coal industry leaders, regulators and vendors on Jan. 30 at the West Virginia Coal Association’s 41st Annual Coal Mining Symposium, held at the Charleston Civic Center.

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