Top U.S. coal producer Peabody Energy (NYSE: BTU) said March 31 tbat it has made the difficult decision to reduce approximately 235 hourly and salaried employees from its North Antelope Rochelle Mine in the Powder River Basin to align the workforce at this, the nation’s largest coal mine, with customer needs.
“While our asset position and contracting strategies give us relative strength, we are taking these actions to match production with customer demand,” said Peabody President-Americas Kemal Williamson. “We regret the impact of these actions on our employees, their families, and the surrounding communities in the Campbell and Converse county areas.”
The reductions affect approximately 15% of the workforce at North Antelope Rochelle, which produces a high-Btu PRB coal of around 8,800 Btu/lb. Mines that produce high heat content coal are usually the last to suffer cutbacks during down markets, with the low-Btu mines getting cut first.
Peabody said it is taking steps to ease the transition through severance and outplacement support. Williamson noted the company has regularly worked to minimize job impacts by actively anticipating and adjusting staffing resources, managing contractors and temporary employees, and using natural turnover to lower staffing levels.
U.S. coal industry conditions have remained challenged, impacted by an oversupply of natural gas and mild winter weather, said Peabody. The U.S. coal industry has seen unprecedented shipment declines this year. Heating degree days year-to-date are 17% lower than last year, with March heating degree days down nearly 30% versus the 10-year average.
While all basins have been impacted, the latest U.S. Energy Information Administration production estimates show that the Powder River Basin is faring better than other regions given cost advantages. In addition, the company believes the decrease in shipments is leading to stockpile reductions in excess of prior expectations.
Peabody’s Powder River Basin operations employ approximately 1,500 workers with approximately 1,150 employed at the North Antelope Rochelle Mine following these reductions. The company’s Powder River Basin operations injected $5.5 billion in direct and indirect economic benefits into the region this past year.
U.S. Mine Safety and Health Administration data shows that North Antelope Rochelle produced 109 million tons in 2015, down from 118 million tons in 2014.
St. Louis-based Peabody Energy is the world’s largest private-sector coal company and a global leader in sustainable mining, energy access and clean coal solutions.