About 300 workers were laid off last week at three Powder River Basin coal mines, adding to a string of bad news for Wyoming’s already struggling coal industry as it responds to deep cuts in demand exacerbated by the COVID-19 pandemic.
Leading coal company Peabody Energy announced Thursday it will lay off 170 workers at the nation’s largest producing coal mine, North Antelope Rochelle near Wright.
Coal firm Navajo Transitional Energy Company also announced 130 layoffs at its Antelope and Spring Creek mines in the Powder River Basin on Thursday. Seventy-three miners were laid off at Spring Creek Mine, which sits in southern Montana and employs workers from northern Wyoming. Another 57 workers at the Antelope Mine in Wyoming were let go.
Both companies cited tough economic conditions and declining demand for coal as reasons for reducing their workforces.
“We regret the hardship that this decision creates for families and our communities,” Clark Moseley, CEO of Navajo Transitional Energy Company, said in a statement. “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 at the North Antelope Rochelle mine mark the third workforce reduction in Wyoming by Peabody Energy this spring. Earlier this month, Peabody Energy laid off three of its employees at the North Antelope Rochelle mine, in addition to letting go of 10 temporary workers at the Rawhide and Caballo mines. The company also let go of 50 temporary workers at its North Antelope Rochelle mine in March.
“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,” Kemal Williamson, Peabody Energy’s president of U.S. operations, said in a statement. “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.”
Peabody Energy offered affected employees separation packages and outplacement services.
Wave of losses
Buckskin mine owned by Kiewit Corp. also reduced its workforce by 60 miners last month. Together, the recent wave of layoffs adds to the steady decline of coal jobs in the Powder River Basin since last year, when the region was rocked by several major bankruptcies in extremely short order.
“What is really unfortunate is the issues that were important in September, October and November, continue to be important to Wyoming today, and one of those issues is the decline of coal,” Gov. Mark Gordon said during a Thursday press briefing on COVID-19. “... Our hearts go out to that community.”
Overall employment and production in the basin’s coal industry have declined steadily since their peak in 2015, according to data from the U.S. Mine Safety and Health Administration.
Demand for coal had continued its precipitous drop in the early months of 2020 — with output during the first quarter setting a new two-decade low, data released by the U.S. Energy Information Administration shows.
Wyoming coal mines produced 54.6 million tons of coal, a sharp 10.8 million ton drop from this time last year. But the COVID-19 crisis appears to have hastened that decline.
Forecasts released by the Energy Information Administration earlier this month predicted market conditions would likely worsen later in the year due to decreased energy demand, declines in global and domestic steel production and overall public health concerns, which has created a chilling effect on economies across the globe.
Meanwhile, fiscal analysts for the state of Wyoming have predicted declines in coal production ranging between 10 to 20 percent over the next two-year budget cycle due to the COVID-19 pandemic. The estimated declines would be equivalent to $35 million to $74 million in lost revenue, according to projections released earlier this month.
For Wright, a town deeply dependent on coal and other energy industries, the economic downturn could have devastating consequences, said Mayor Ralph Kingan. A vast majority of families living in Wright rely on the nearby coal mines for employment or business.
“We’re pretty dependent on energy here,” Kingan said. Oil workers have started to pack up and leave Wright, as employers shut in wells during a historic low in oil prices.
Gillette, a city surrounded by several of the nation’s largest mines, also stands to sustain blows from the layoffs. Geno Palazzari, communications manager for the city, said layoffs like this “reverberate throughout the community — not just the coal industry but any of the extractive industries.”
Dubbed the Energy Capitol of the Nation, the city of 30,000 is a major hub for the fossil fuels that drive Wyoming’s economy: coal, oil and natural gas.
“Operating conditions are very difficult today and are exacerbated by the effects of the COVID-19 pandemic and the economic shut-down,” said Travis Deti, executive director of the Wyoming Mining Association. “It’s frustrating and sad.”
The response to the coronavirus outbreak has not been uniform across all operators, but a majority have responded, according to Deti. Measures taken by operators include screening visitors and vendors with questionnaires and keeping employees from congregating in high-trafficked areas.
Operators continue to fight to find sufficient sanitation and cleaning supplies, along with protective wear, like particulate filters. But all 16 coal mines in Wyoming have been able to continue operating during the pandemic, as industry leaders have urged the governor to exclude mining businesses from the state’s public health orders.
When asked Thursday if the state was prepared for the coal industry’s decline, the governor gave a sobering response.
“I don’t think anyone is prepared for the kinds of losses we have seen periodically over the past couple of years,” Gordon said. “This one is particularly painful because it is driven so much by a complete downward trend in the global economy.”
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