The Powder River Basin’s coal workforce shrunk by about 6% Thursday with the layoff of 300 workers from three mines.
Peabody Energy Corp. employees were informed Thursday that about 170 employees have been laid off from the North Antelope Rochelle mine near Wright in Campbell County.
Navajo Transitional Energy Co. also announced 130 layoffs, 73 from its Spring Creek Mine in southern Montana and 57 employees at the Antelope mine in southern Campbell County.
The layoffs represent about 6% of the 4,834 people employed by Powder River Basin coal mines at the end of 2019, according to the federal Mine Safety and Health Administration.
“We have made a difficult decision to reduce our workforce at the North Antelope Rochelle mine based on the need to align our workforce with customer needs,” said Peabody President of U.S. Operations Kemal Williamson in a prepared statement confirming the layoffs.
“We know this announcement comes at a time when many are already challenged with circumstances surrounding the current national emergency, and we very much regret the added impact this difficult decision has on employees, their families and our nearby communities in northeast Wyoming,” he said.
The employee reductions are immediate and those affected have been offered a separation package, Peabody said. They’ll also receive outplacement services and support from the company’s employee assistance program.
North Antelope Rochelle is the world’s largest coal mine. It produced 85.3 million tons of thermal coal in 2019, according to the federal Mine Safety and Health Administration. That’s nearly 33% less coal than the 118 million tons NARM mined in 2014.
Including 60 layoffs from Kiewit Corp.’s Buckskin mine and workforce reductions of 63 from Peabody over the last six weeks, the PRB coal industry is down about 420 jobs so far this year.
”Dismal” coal market
Given a “dismal” market for coal now, the Powder River Basin can expect to lose more coal jobs, said Rob Godby, a UW energy economist.
“Right now for this year, at the rate (Wyoming coal mines) are producing, we’re tracking almost 60 million tons less than last year,” he said. “If you think about it, we were already at a really slow pace, but since the (coronavirus) outbreak started in Wyoming, our production is down 16% more from what we were already doing in a really bad year.”
Given that demand for coal is typically weakest this time of year and that coal is more expensive than natural gas, Godby said more coal layoffs are likely to happen.
“I would expect that this is just the start,” he said Thursday. “The awful news today is that what’s happening in the national economy is catching up to the coal miners. The unfortunate reality is firms will have to readjust their labor forces to deal with that.
“You can’t continue to keep as many workers as you have when production is down this much.”
Before Thursday, NARM employed 1,189 people, making the 170 workers a reduction of more than 14% of the mine’s workforce.
NTEC, which bought the Antelope, Cordero Rojo and Spring Creek mines from a bankrupt Cloud Peak Energy in October, said a weak market for thermal coal has been exacerbated by the COVID-19 pandemic that has reduced coal demand further.
“We regret the hardship that this decision creates for families and our communities,” said NTEC CEO Clark Mosely in a press release. “We are confident in our projections for future sales, and all mines will continue operations to fulfill orders as we look to better days ahead.”
The layoffs also come as the company continues to work with the Department of the Interior to fully transfer all leases and mining permits to NTEC. It has payment agreements in place with the federal government for the Cloud Peak royalty payments NTEC assumed as part of the sale.
It also has payment plans with the state, Campbell and Converse counties for payment of production taxes owed that also were assumed as part of the deal.
The layoffs also come as the company continues to negotiate with the federal government over royalty payments left over from Cloud Peak, which means NTEC is operating on Cloud Peak’s mining permit.
The 130 layoffs at Spring Creek and Antelope represent more than 15.5% of NTEC’s 831 employees at the two mines.
Doing them a favor?
Although eliminating people is always the last choice for a struggling business, now may be the best time to do it because of the COVID-19 pandemic and federal aid available for workers who lose their jobs because of the virus.
The impact that virus lockdowns across the nation are having would include coal mine workers, Godby said. That means that given the choice of laying off or furloughing employees rather than reducing hours or pay works out better for them because they can get an extra $600 a week for four months on top of their state unemployment benefits.
“Given the benefits available right now, this is why some firms are letting people go, so they can take advantage of those benefits,” he said. “In some ways, if you’re going to have to cut hours drastically then let workers go, you might as well just let them go now.”