The company is forecasting lower production in the new year, about 5.5 million tons, down from the mine’s record high of 8.6 million tons in 2013. The decrease, however, reflects soft coal markets and not the uncertainty over an October 2013 permit issued by the Montana Department of Environmental Quality, according to company spokesman Mike Dawson.
Dawson said, “due to pressures from soft coal markets and a lower production budget for 2016, Signal Peak Energy has been forced to restructure its workforce.” That resulted in a reduction in full-time employees from 303 to 237 heading into 2016. Eight positions were eliminated during the realignment, he said.
The affected employees, primarily underground miners, were offered a severance package and will be eligible for rehire as jobs become available, he added.
The layoffs and production decrease are totally unrelated to the ongoing permit brouhaha that company officials warn could lead to the mine’s complete shutdown in mid-2016 if it is not resolved favorably.
The Montana Board of Environmental Review dealt a potentially lethal blow to Signal Peak in October when it rejected the 2013 expansion permit. The board agreed with the Montana Environmental Information Center’s (MEIC) permit objections that focus on mining’s potential impact on the area’s water quality.
Signal Peak Energy, which said the 7,100 acres contains an estimated 110 million tons of recoverable coal, enough to last the mine another decade or so, has been negotiating a possible deal with MEIC and the review board that would allow the mine to continue operating. The board of environmental review is scheduled to meet again on January 14.
Signal Peak’s production has been declining over the past couple of years. Following its high mark in 2013, the mine’s output decreased to 7.9 million tons in 2014, according to the federal Mine Safety and Health Administration. Production totaled about 4.8 million tons through the first three quarters of 2015.
Signal Peak, Montana’s only underground coal mine, is co-owned by two Ohio companies, FirstEnergy and Boich Cos., and Pinesdale LLC, a wholly owned subsidiary of Gunvor Group Ltd., a Swiss commodity trader.
FirstEnergy and Boich each sold a third of their ownership interest in the mine to Pinesdale several years ago. Most of the mine’s coal is sold overseas.