Peabody eliminates 235 jobs in Powder River Basin

TORONTO (miningweekly.com) – Struggling US coal producer Peabody Energy will lay off 235 permanent and contract workers from its flagship North Antelope Rochelle mine, in the Powder River basin (PRB), to better align the workforce with subdued customer needs, it said on Thursday.

The company, the world's largest private-sector coal company, earlier this month warned that it was on the brink of bankruptcy, as falling global demand for the fossil fuel had affected its ability to service its substantial debt load. As a result, about 15% of the workforce at the North Antelope Rochelle mine would be affected.

"While our asset position and contracting strategies give us relative strength, we are taking these actions to match production with customer demand. We regret the impact of these actions on our employees, their families, and the surrounding communities in the Campbell and Converse county areas,” stated Peabody president for the Americas Kemal Williamson.

Peabody advised that it was taking steps to ease the transition through severance and outplacement support. The company's PRB operations employed about 1 500 workers with about 1 150 employed at the North Antelope Rochelle mine following the reductions.

US coal industry conditions had remained challenged, impacted by an oversupply of natural gas and mild winter weather. The US coal industry had also seen unprecedented shipment declines this year. Heating degree days, a measurement designed to reflect the demand for energy needed to heat a building, were 17% lower year-to-date than last year, with March heating degree days down nearly 30% over the ten-year average.

While all basins had been impacted, the latest Energy Information Administration production estimates showed that the PRB was faring better than other regions, given its cost advantages.

Peabody advised that it believed the decrease in shipments was leading to stockpile reductions in excess of previous expectations.