More layoffs hit miners in the Powder River Basin

May 22, 2020

The decline in demand for coal and the COVID-19 pandemic has led to numerous layoff and furloughs throughout the coal sector in the United States.

Coal firm Navajo Transitional Energy Company announced Thursday that it will furlough 93 hourly workers and lay off eight salaried employees at its Antelope coal mine near Wright, WY in response to the economic downturn caused by the COVID-19 pandemic. The Casper Star Tribune reported that since the onset of the pandemic more than 550 miners throughout the Power River Basin in Wyoming and Montana have been laid off or furloughed.

“As COVID-19 continues to ravage the U.S. economy, domestic demand for coal has declined,” Catie Kerns, a spokeswoman for NTEC, told the Star-Tribune in a statement. “While we have taken steps to preserve as many jobs as possible, including temporary pay reductions, the continued decline has resulted in the need for additional workforce reductions at our Antelope Mine, near Gillette.”

The eight salaried workers will receive severance, according to the company. All affected workers should be eligible for the extended unemployment benefits provided under the federal coronavirus relief act, according to NTEC. The company does not anticipate laying off or furloughing workers at its two other mines in the basin.

In April, 57 workers at the Antelope Mine were let go. In addition, 73 miners were laid off at its Spring Creek Mine, which sits in southern Montana and employs workers from northern Wyoming.

Much of the coal from the Powder River basin is purchased by customers in the upper Midwest’s industrial belt, a region also hit hard by the pandemic. Decreased electricity demand has led to less need for coal.

“Demand for coal from the Antelope mine has been significantly reduced due to continued economic challenges faced by the mine’s customer base,” said Kerns, the NTEC spokeswoman. “As conditions improve we will look to bring back the workforce and continue providing high quality coal as we support the economic recovery of the region and U.S.”

Overall employment and production in the basin’s coal industry have declined steadily since their peak in 2015, according to data from the U.S. Mine Safety and Health Administration. Utility companies have gradually turned to less expensive natural gas or renewable energy sources to supply electricity to customers.

Demand for coal continued to plunge in the early months of 2020 — with output during the first quarter setting a new two-decade low, according to data released by the U.S. Energy Information Administration. The COVID-19 crisis appears to have hastened the commodity’s decline.

“What you’re seeing mine by mine is that labor forces are being adjusted to the current environment, and you have the (structural) decline of coal that you’re seeing on top of that, which would just hasten the need to lay people off,” Rob Godby, a University of Wyoming economist, told the Star-Tribune in the days following the first wave of layoffs at NTEC’s mines. “The short of it is: Under the current conditions with the structural decline, you would expect layoffs, and not insignificant layoffs, across the basin.”

Forecasts released by the Energy Information Administration earlier this month predicted market conditions would likely worsen this year due to a slump in energy demand, declines in global and domestic steel production and public health measures taken to prevent the spread of COVID-19.

 

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