300 Layoffs In PRB Arrive With Production Down ~20% From 2019
Two coal companies with mines in the Powder River Basin (PRB) announced lay-offs today in Peabody Energy and the Navajo Transitional Energy Company (NTEC).
NTEC announced a 15 percent workforce reduction between two mines, according to employment data from the U.S. Mine Safety and Health Administration (MSHA). Spring Creek Mine in southern Montana saw 73 employees laid off and Antelope Mine in Campbell County Mine saw 57.
The company said in a news release that COVID-19 has had a major impact on coal demand.
"We regret the hardship that this decision creates for families and our communities," said NTEC CEO Clark Moseley. "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."
Peabody Energy also announced a 15 percent reduction at its North Antelope Rochelle Mine (NARM) in Campbell County, the largest coal mine in the world, with 170 layoffs. It's total employment numbers come from MSHA employment data. The news release pointed to COVID-19's impact on demand as well alongside coal plant retirements, availability of renewable energy, and historically low natural gas prices.
"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," said Peabody President U.S. Operations Kemal Williamson
The company said lay-offs are taking effect immediately and will come with a separation package, outplacement services and support from the employee assistance program.
For some, it's déjà vu with March 2016 seeing a 15 percent reduction at NARM as well due to steep production declines.
Wright Mayor Ralph Kingan said he heard that workers at NARM started getting calls this past Monday and Tuesday from the company.
"I think that's pretty good of 'em, where they just didn't throw them to the wolves like Blackjewel did to everybody up in Gillette. So, at least they got a phone call and said things are bad or… whoever they laid 'em off," he said.
This isn't the first round of lay-offs for 2020. The Buckskin Mining Company, owned by the Kiewit Corporation, let 60 employees go across all departments in mid-March due to production declines.
In two previous announcements this year, Peabody laid off a total of 63 temporary workers pointing to decreased production as well. 53 of the workers were employed at NARM. The other ten were at the Caballo and Rawhide mines.
Andy Blumenfeld, IHS Markit's head of market analytics, said reductions are company-wide with corporate staff involved as well. The company will review its first quarter earnings on April 29 and will likely have more information then
To all the recent changes, Travis Deti, executive director of the Wyoming Mining Association, said operating conditions are very difficult today.
"[They're] exacerbated by the effects of the COVID-19 pandemic and the economic shut-down. It's frustrating and sad," said Deti.
IHS' Blumenfeld said his company projects a 10 percent decline in quarterly coal production from last year.
"[COVID-19] has become really a disaster for many coal producers," he said. "I actually believe that there could be additional layoffs in the upcoming weeks."
He said companies like NTEC and Eagle Specialty Materials are both in vulnerable positions as the companies are still new to the Powder River Basin.
Several companies in the rust belt and Appalachia have closed down temporarily. Blumenfeld said that's harder in Wyoming given the size of the mines, but that he suspects it may come in the near future.
In a press conference, Gov. Mark Gordon said he knew about the lay-offs several days ago and has been in contact with the mayor of Gillette. He added the decline in coal demand is an ongoing issue and the state is working to find other options for workers.
"We are continuing to try and find ways that we can pivot those very talented workers into different jobs and actually we've been looking at ways to bring better training," he said.
According to the U.S. Energy Information Administration (EIA), coal production this week is down 41.5 percent compared to the same week last year. Year to date, the EIA reports coal production is down 19.6 percent compared to last year.
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