The Crested Butte News Serving the Gunnison Valley since 1999
Company cites “continuing challenges” in coal markets
By Alissa Johnson
Mountain Coal Company, a subsidiary of Arch Coal, announced last week it was laying off 80 people at the West Elk Mine in Somerset, which lies within Gunnison County.
The company cited “continuing challenges” in domestic and international coal markets as the reason for the reduction in the workforce.
“Up to this point, the operation has managed the current market downturn through cost-reduction initiatives, efficiency improvements, and natural attrition. However, lack of incremental coal demand has forced us to take further action to better align production and staffing levels with customer needs, and to ensure West Elk remains competitive long-term,” a company statement read.
Though the mine lies within Gunnison County, county manager Matthew Birnie said the layoffs won’t have a significant impact locally, though the overall decline of coal will trickle down to county revenues. “It’s indicative of the continuing decline of coal in the county and across the country. The layoffs themselves don’t have an impact because almost all of them live in Delta County,” he said.
In recent months, Arch Coal has made headlines for its financial troubles related to that decline. The company filed for bankruptcy in January, and as recently as April, the Casper Star Tribune reported that the company had paid its executives substantial financial rewards even as the company did not record a profit. According to the article, Arch Coal had “failed to record an actual profit since 2011.”
According to Matt Reed, public lands director for High Country Conservation Advocates (HCCA), “It’s a tough time for the miners laid off, and we sympathize with them. The coal market across the U.S. is declining for a variety of reasons—competition with cheaper natural gas, the growth of renewable energy, and a decline in exports as China and other markets reduce coal consumption.”
The company’s decision is not related to the delay of a supplemental environmental impact statement (EIS) for an exception to the Colorado Roadless Rule that would allow for the construction of temporary roads within a 19,100-acre area in the North Fork Valley.
The Forest Service undertook the EIS after a federal judge ruled that the agency did not fully comply with the National Environmental Policy Act and needed to conduct a quantitative analysis of greenhouse gas emissions. That EIS was expected this spring, but the agency announced last month that it would release it this fall.
At the time, Lawrence Lujan, Forest Service media officer, said that the Office of Management and Budget (OMB) found the final rule to be a “significant regulatory action… which indicates the rule may ‘raise novel legal or policy issues’… The Forest Service and cooperating agencies are finalizing the federal review and notification processes required for rulemaking.”
“It’s worth noting that Arch Coal has more than 50 million tons of coal currently available to mine under lease,” Reed said. “The Forest Service reconsideration of the Colorado Roadless Rule exemption has not impacted the West Elk Mine’s access to that coal.”
At production rates seen in recent years, the mine could operate for another 10 years. At the rate the company has mined between January 1 and April 30 of this year, the company can mine for more than 20 years.
Logan Bonacorsi, spokeswoman for Arch Coal, also reiterated to the Crested Butte News that, “Last week’s layoffs at West Elk were a result of ongoing challenges in domestic and international thermal coal markets and lack of incremental demand. That said, the Sunset Trails lease remains highly important to West Elk and will enhance its long-term prospects and competitiveness going forward. We encourage the [agency] to continue to move forward with urgency in efforts to secure the reinstatement of the full Colorado Roadless Rule, including the North Fork Exception.”
