UMWA local ratifies new labor deal at Peabody’s Kayenta mine

United Mine Workers of America Local 1924 has ratified a new six-year agreement that is effective for represented employees at Peabody Energy’s (NYSE: BTU) Kayenta strip mine in Arizona where about 98% of the hourly workforce is Native American.

Peabody said Sept. 17 that the agreement has provisions that will allow for efficiency improvements and includes wage increases and enhancements for a variety of benefit programs.  

The Kayenta mine supplies fuel to the captive Navajo Generating Station in Page, Ariz. The operations create more than $117m in annual direct economic benefits to tribal communities. Employees have a history of strong safety performance and this year achieved a milestone of more than 1 million work hours without a lost-time injury, Peabody noted.

U.S. Mine Safety and Health Administration data shows that Kayenta produced 4 million tons in the first half of this year and 7.5 million tons in all of 2012.

The new six-year agreement, which went into effect immediately, includes hourly pay increases totaling $5.50 over the life of the agreement, as well as a ratification bonus of $750, the UMWA said. The new agreement also includes improvements in pensions for current and future retirees, as well as improvements in life insurance, accidental death and dismemberment, sickness and accident and other benefits. Increases in dental and vision insurance coverage by 20% from current levels are also included in the agreement.

The agreement also covers retirees from now-closed Peabody Western operations, including the Seneca strip mine in Colorado and the Big Sky strip mine in Montana.

“I commend International District 22 Vice President Mike Dalpiaz and the L.U. 1924 leadership for their success in negotiating this contract,” UMWA International President Cecil Roberts said. “We are very proud of our members who work at Kayenta. They are hard-working, professional, productive coal miners who also are among the most safety-conscious miners I have ever met.”

At least part of the Navajo coal plant, and some of the jobs at Kayenta, are in danger. The owners of the Navajo plant have come up with a regional haze plan that calls for shutting one of the three 750-MW units at the plant, something that has become an increasingly common haze compliance option for Western power plants.

The U.S. Environmental Protection Agency wants NOx emissions reduced by 84% at Navajo through the installation of selective catalytic reduction (SCR) on all three units. But an alternative plan submitted recently to the EPA would shut down one of three units by 2020, cutting pollution beyond what EPA has proposed. The plant’s operator, the Salt River Project, said the plan takes into account potential ownership changes and pushes back the implementation of expensive pollution controls.

Two plant owners, the Los Angeles Department of Water and Power and NV Energy, plan to get rid of their stakes in Navajo in an effort to cut their greenhouse gas emissions. SRP, the U.S. Bureau of Reclamation, Tucson Electric Power and Arizona Public Service also own shares of the power generated at the plant.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.