Peabody Energy Corp. announced that it will cut 235 jobs from its North Antelope Rochelle Mine in Wyoming’s Powder River Basin. The mine is the largest coal mine in the United States and the announcement can be viewed as an indicator that coal’s collapse has reached the Powder River Basin.
“It’s an incredibly efficient, low-cost mine, and the fact that job cuts are occurring there shows even the low-cost guys aren’t completely unscathed,” said Jeremy Sussman, an analyst at Clarksons Platou Securities Inc, told Bloomberg. “This is a trend that's going to continue.”
Peabody is struggling with $6.3 billion of debt and is facing bankruptcy if it does not make an overdue interest payment by April 14. It's struggled to complete the sale of three Colorado and New Mexico mines to Bowie Resource Partners, which it has said it probably needs in order to comply with loan covenants.
Peabody and Bowie pushed back from March 31 the date when they can terminate that deal. Peabody can now cancel the sale after April 7, while Bowie won't be able to do so until after April 15, Peabody said in a filing. They intend to use the time to investigate other payment structures, “which may include cash and non-cash consideration,” the filing said.
Wyoming had produced 66.5 million tons of coal through March 26, down 30 percent from a year ago, according to the U.S. Energy Information Administration.
Peabody’s rivals including Alpha Natural Resources Inc. and Arch Coal Inc. have already filed for bankruptcy. They also operate in the Powder River Basin. On March 31, Creve Coeur-based Arch announced it was laying off 242 workers at its Black Thunder mine, just up the road from North Antelope.
Black Thunder produced 99 million tons in 2015, making it the country’s second-biggest coal mine, according to data compiled by the Mine Safety and Health Administration. North Antelope produced 109 million tons.