BILLINGS — A Montana coal mine cut 66 jobs and is slashing production amid an industrywide slowdown that’s starting to affect the largest coal-producing region of the United States.
Signal Peak Energy announced Wednesday that 58 employees had been laid off and eight vacant positions eliminated at its Bull Mountain Mine. That’s about 20 percent of the workforce at the underground mine in central Montana.
The company also will cut production, from almost 8 million tons in 2014 to 5.5 million tons annually “until the market changes,” said Signal Peak President Brad Hanson, who blamed poor market conditions.
“We will not sell coal for a loss and crash our company like so many others have,” Hanson said.
Montana and Wyoming combined produce almost half the coal in the U.S., primarily from the Powder River Basin along the states’ shared border.
Montana Gov. Steve Bullock said the state would provide assistance to laid-off workers, most of whom were full-time, underground miners. They were offered a severance package and will be eligible for rehire if production rebounds, Signal Peak said in a prepared statement.
“The challenges of a soft global coal market are real, and it is unfortunate it is impacting Signal Peak,” Bullock said.
Signal Peak is jointly owned by Wayne M. Boich and utility FirstEnergy — both of Ohio — and Gunvor Group, a global commodities trading company. Bull Mountain Mine is Montana’s only underground coal mine, with an estimated 431 million tons of the fuel in its reserves.
Other coal companies in the region are preparing to scale back operations as competition from cheap natural gas erodes coal’s once-dominant role providing fuel for power plants.
Wyoming-based Cloud Peak Energy, which operates the Spring Creek mine near Decker, Montana, and is Montana’s largest coal producer, announced that it had renegotiated the terms under which it ships coal to the West Coast for export to Asia.
Another coal mine proposed by Arch Coal Inc. near Ashland, Montana, has stalled as the St. Louis-based company teeters on the brink of bankruptcy.
Representatives of Signal Peak said Wednesday that the layoffs at Bull Mountain were not connected to the recent rejection of a permit that would allow the mine to expand into new areas.
Environmentalists had appealed when the state Department of Environmental Quality granted the permit in 2013. The state Board of Environmental Review ruled against the mine, citing potential long-term contamination to underground aquifers.
Negotiations to resolve the dispute are pending. If a deal is not reached soon, Signal Peak has warned that it could be forced to shut down mining in mid-2016.
The two sides were “not far apart” as of Wednesday, said Anne Hedges with the Montana Environmental Information Center, which challenged the expansion permit.
“Our goal is to allow them to keep moving forward, but making sure they don’t do anything that’s going to interfere with their ability to protect the groundwater,” she said. “They don’t get to destroy water quality just because they are not able to make a buck.”
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