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Coal layoffs in Indiana continue as industry struggles

April 1, 2016

Another coal producer in Indiana has announced major layoffs as the industry contracts nationwide.

Triad Mining LLC reported to state officials late last month that it expected to permanently terminate about 75 employees of its Freeland Mine operations in Edwardsport, effectively idling the sprawling complex.

The layoffs are expected to begin in late May and should be complete by mid-June, Triad officials said in a notice to the Indiana Department of Workforce Development.

The job losses are the just the latest in a string of layoffs in Indiana’s coal industry.

In January, Vigo Coal Co. announced that it would lay off 66 employees in Indiana and Illinois. In November, Gibson County Coal LLC notified Indiana officials it would idle production at the Gibson Mine in Princeton, eliminating 120 jobs.

In October, United Minerals Co. LLC and UMI LLC announced 138 layoffs at several mines in southeast Indiana.

“This drastic reduction in force is being contemplated due to a reduction in coal sales and anticipated ongoing reduction in demand for coal sales,” officials wrote in the state notice.

The coal industry is being ravaged nationwide by shrinking demand as power plants burn less of the fuel because of cheap natural gas and tougher environmental policies. In fact, electricity generation from coal fell 13 percent last year compared to the previous year, according to the U.S. Energy Information Administration. U.S. coal production also fell to its lowest level in nearly three decades last year, the EIA said.

“Utilities are burning as much natural gas as they can and will likely spend the entire year whittling down their bulging coal inventories,” Mark Levin, an analyst at BB&T Capital Markets, said in a note Tuesday.

Last May, two major coal companies operating in West Virginia said they expected to lay off 2,267 workers.

In a news release at the time, Murray Energy CEO Robert Murray said the layoffs were “due to the increased utilization of natural gas to generate electricity … and the ongoing destruction of the United States coal industry by President Barack Obama.”

On Thursday, Peabody Energy Corp. confirmed that it would cut 235 jobs, or 15 percent of its staff, at its North Antelope Rochelle Mine in Wyoming. It’s evidence that coal’s collapse has spread beyond Appalachia’s hills to the biggest open pit in America’s cheapest coal-producing region, 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., in a phone interview. “This is a trend that’s going to continue."

Peabody recently warned that it might have to file for Chapter 11 bankruptcy protection, which is not good news for Indiana.

St. Louis-based Peabody had about 7,600 employees at the end of last year and operates mines in Arizona, Colorado, Illinois, Indiana, New Mexico and Wyoming. It also has mines in Australia.

The company has at least six mines in Indiana that employ at least 1,250 workers, according to the company's website, including Bear Run Mine in Sullivan County, the largest surface mine in the eastern United States.

Peabody makes most of its money by selling its coal to utility companies that use it to generate electricity. But many utilities have shifted to using natural gas, which costs less than coal and produces less pollution.

 

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