More layoffs for coal mine
Gunnison County operation 'idled,' resulting in 115 let go
Originally published 2013-12-05
More miners are out of a job.
Officials at a Gunnison County coal mine announced this week another set of layoffs after a carbon monoxide leak earlier this year ground extraction of the resource to a halt.
Oxbow Mining announced an "idling" of the Elk Creek Mine near Somerset Monday that entails a layoff of 115 employees.
"What it means is we'll have a skeleton workforce at the mine site and eventually the miners will be let go until we can get a new longwall," explained Brad Goldstein, director of Corporate Affairs for Oxbow Mining's parent company, Oxbow Carbon. A longwall is the panel of large hydraulic shields that essentially hold up the mountain while coal is being removed.
A required federal Worker Adjustment and Retraining Notification (WARN) Act notice was filed with the Colorado Department of Labor and Employment Monday that details the positions being eliminated.
In October, an additional 142 employees were laid off. A carbon monoxide leak closed the Elk Creek Mine last January. Subsequent monitoring indicated that there had been a fire in the mine. That portion of the mine was sealed and abandoned.
Goldstein said that when the area was unsealed, there was indication that a fire had been burning again.
As a result, Oxbow Carbon officials for safety's sake decided to seal the mine — and abandon tens of millions of dollars in equipment by doing so.
Since October's layoff, the 115 employees let go this week have been working to develop an new longwall panel, said Oxbow Mining President Mike Ludlow.
"The best thing for a mine is to balance mining and longwall development at the same time, so you don't get too far out ahead," he said. "If you're an automaker, you don't want to be making all engines and no cars."
Twenty employees, including the executive team, are planned to continue working at the mine site — in part to prepare for future operations, according to officials.
Reserves under lease or that have applied for total about 10.5 million tons.
Oxbow Mining has been producing coal in the North Fork Valley since 1995. The company opened the Elk Creek Mine in 2001.
At the height of production in 2008, the mine employed more than 350 people.
While the mine is located near the northern tip of Gunnison County — and pays taxes to that local government — most of the miners live in Delta County.
Ludlow couldn't say when operations would resume, but this week's WARN Act notice to the state indicates that the layoff of employees is anticipated to exceed six months.
"It's a difficult question," Ludlow said. "We're actively pursuing all options on procuring another longwall mining system."
The estimated timeframe for developing and manufacturing a new system is 16 months from the time of purchase, at a cost of about $70 million, he said.
David Berry, director of the Colorado Division of Reclamation, Mining and Safety's (DRMS) Coal Regulatory Program, said that the status of the Elk Creek Mine's permit is still "active."
"A change can eventually occur," he explained. "The operator can choose to keep the permit in active status if they reasonably anticipate the production will resume soon."
Other options include temporary cessation of a permit or closing the mine altogether and beginning reclamation.
Berry added that if recovery of the mine and pursuit of new leases is imminent, DRMS officials would allow the operation's permit status to remain active "for a short period of time."
"If it looks like it's carrying on for a longer period of time — and I can't put a specific time frame on it — then we'd probably push for temporary cessation status or reclamation," he said.
Ludlow indicated that Oxbow "definitely" plans to resume mining at Elk Creek.
"We're optimistic that the future for the coal market is going to be strong," he said. "We feel that it's at bottom or near bottom and that the coal market has a good future."
Oxbow Mining also is continuing to work toward developing additional coal reserves in the Oak Mesa area of the North Fork Valley, but the prospect of a mine coming to fruition is still a ways off.
"That permitting is way down the road," Oxbow Carbon's Goldstein said.
(Will Shoemaker can be contacted at 970.641.1414 or email@example.com)