MEXICO CITY, June 19 (Reuters) - A unit of Mexican steelmaker Altos Hornos de Mexico (AHMSA) said on Friday it will lay off 2,000 workers in Mexico and 400 in Texas after state power company the Federal Electricity Commission (CFE) “unilaterally” canceled a contract to purchase coal.
AHMSA said in a statement its subsidiary Minera del Norte will lay off workers at its MICARE unit in Mexico and Dos Republicas Coal Partnership in Texas. Another 5,000 workers from companies supplying goods and services will also be impacted.
MICARE extracts some 7 million tons of steam coal annually, which it sells to CFE’s Jose Lopez Portillo and Carbon II coal-fired power plants in Mexico’s Coahuila state. CFE did not respond to a request for comment. Mexican newspaper Vanguardia reported on May 8 that CFE had reviewed the contracts for coal supply and found them to be “disadvantageous.” AHMSA said it is facing losses of at least $250 million.
“All available legal recourses will be sought so that the Federal Electricity Commission is held responsible for the economic and social damages generated by this unilateral decision,” it added. (Reporting by Anthony Esposito; Editing by Sandra Maler)