04/15/2014 12:28 EDT | Updated 06/15/2014 05:59 EDT

Walter Energy to idle two B.C. mines that will temporarily layoff about 700

VANCOUVER - U.S.-based Walter Energy (TSX:WLT) says it will temporarily lay off about 700 workers at two coal mines in British Columbia due to difficult market conditions and lower prices.

Walter Energy said it expects to incur severance charges of approximately $7 million in the second quarter of 2014 in connection with the idling of the mines in northeastern B.C.

The company said it will immediately idle the Wolverine mine, with about 415 employees. Its Brazion mine, with about 280 employees, will be idled by July.

Walter Energy said it will continue to operate its preparation plants at these mines to complete processing of coal that already in its inventory. Other administrative staff also will be laid off.

"These layoffs are particularly unfortunate because our employees have worked very hard to keep these mines competitive in the face of daunting market conditions," CEO Walter Scheller said in a news release on Tuesday.

Scheller added that idling the mines in the current pricing environment is "best course of action" until Walter can achieve "reasonable value" from these reserves.

Walter Energy is a metallurgical coal producer for the global steel industry, including markets in Asia, South America and Europe. The company also produces thermal coal, anthracite, metallurgical coke and coal bed methane gas. It has about 3,600 employees with operations in the United States, Canada and United Kingdom.

As of Dec. 31, 2013, Walter Energy had approximately 1.1 million metric tons of coal in inventory in Canada.