61 miners get pink slips at Somerset mine
The nation’s recession and increased use of other electricity-generating fuels hit home for 61 coal miners who were laid off at the West Elk Mine in Somerset on Tuesday and Wednesday.
The layoffs follow the release of about 40 contract miners there a few weeks ago.
“Unfortunately, the U.S. coal markets have undergone an unprecedented contraction in recent months,” said Kim Link, spokeswoman for St. Louis-based Arch Coal, which owns Mountain Coal Co., the mine’s owner.
West Elk Mine had about 417 full-time employees before this week’s reduction, Link said.
The mine produced 5.3 million tons of coal last year.
Link said the layoffs were immediate, and that affected employees were given severance packages based on length of service.
“Mountain Coal deeply regrets the need for this action, and we tried to avoid impacts on the West Elk work force to the greatest extent possible,” she said.
Link said U.S. coal demand is expected to decline by more than 100 million tons this year because of continued economic weakness. The slowdown has significantly reduced electricity usage and industrial activity, which drive coal demand.
In announcing its first-quarter results in April, Arch Coal said it expected a slowdown because of factors such as its customers switching to natural gas, increased use of nuclear energy and more precipitation in regions producing hydroelectric power.
Arch Coal contributes about 12 percent of the nation’s coal supply and provides the fuel for 6 percent of its electricity, with operations in Colorado, Wyoming, Utah and the East.
Link said the company has been scaling back production, and each mine is handling that in a different way, not necessarily involving layoffs.
The company said in its April news release that West Elk Mine encountered difficult geologic conditions during transition to a new coal seam and experienced a reduction in the quality of coal shipped from the mine.
Operational challenges at West Elk contributed to an operating loss of $2.22 per ton for the company’s Colorado and Utah operations during the first quarter of the year, compared to a profit of $4.23 per ton in the fourth quarter of 2008.
“West Elk has absorbed its start-up issues and is managing the situation increasingly well,” John Eaves, the company’s president and chief operating officer, said in the release.
He said the company is working to improve product quality at the mine through efforts such as blending of coal, and it expects conditions and coal quality to improve as the mining progresses.
Link said the company is hoping the economy will turn around and the market for coal will pick up in 2010.