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   Vol. 69/No. 8           February 28, 2005  
Peabody to close union mine in Colorado
CRAIG, Colorado—The Seneca coal mine, one of the two mines in northwest Colorado organized by the United Mine Workers of America (UMWA), will close by the end of 2005, throwing 100 surface miners out of work. A few miners will remain to do reclamation work, which is expected to last into next year.

Seneca, owned by Peabody Coal, is a captive mine that has provided more than 1 million tons of coal annually for the past four decades to the nearby power plant in Hayden, about 20 miles east of Craig. The St. Louis-based Peabody is the world’s largest privately owned coal company. The union’s contract with the company expires in September of this year.

Members of the UMWA Local 1385 laid off from Seneca will be put on a union panel that includes three other Peabody-owned mines—the Big Sky mine in southeastern Montana, and the Kayenta and Black Mesa mines on the Navajo Nation lands in Arizona. The possibilities of getting hired off the panel are slim.

The Big Sky mine shut down coal production in December 2003, laying off most of the 65 miners when it lost its contract selling coal to Minnesota Power and Light.

The owners of the Black Mesa mine have been involved in a battle with the Navajo and Hopi nations about the mine bosses’ use of water for mining while the Hopi and Navajo who live there face water shortages. Coal slurry from the Black Mesa mine is transported 273 miles to Southern California Edison’s Mohave Generating Station in Laughlin, Nevada, using a water-driven system that drains 3.3 million gallons of water daily from the aquifer below the desert lands of the two tribes. But the future of that power plant is not certain, leaving few hiring prospects at the Black Mesa mine.

In the Craig area, Peabody bought Twentymile Coal in April of last year. Twentymile is an underground nonunion coal mine that employs about 300 miners and ranked 18th among the country’s coal producers in 2003. Twentymile accounts for 5 percent of Peabody’s total coal production and about 20 percent of coal production in Colorado, the Rocky Mountain News reported. Peabody plans to increase production at the mine from its average of 8 million to 12 million tons per year within three years, making it one of the biggest mines in the nation. The company plans to hire more miners and install a new longwall system.

Longwall mining, a highly productive mining method used in underground mines, accounts for more than 50 percent of underground coal production, according to the Energy Information Administration.  
Twentymile mine reopens nonunion
Twentymile mine had been a UMWA-organized surface mine, miners in the area report. When the owners replaced the surface mine with underground operations, it opened them nonunion.

Peabody also bought Empire mine near Craig as part of its purchase of Twentymile from RAG Coal International. Empire mine is a formerly UMWA-organized underground mine that was shut down in 1995 during a strike by UMWA Local 1799, miners report. Empire still has many coal reserves and Peabody is evaluating whether to reopen the mine, according to press reports.

Members of UMWA Local 1799, which includes former Empire miners and retirees, still meet every month in Craig.

“The coal reserves that are economically mineable have been depleted” at the Seneca mine, company spokeswoman Beth Sutton told the Denver Post on January 4. But many workers at Seneca believe the bosses are shutting down the mine to get rid of the union.

Peabody also owns coal reserves south of Hayden, that stretch west of Seneca to east of Trapper, a surface mine organized by the Brotherhood of Operating Engineers Local 9. Many say that after Seneca shuts down the company will also try to open up mining in these reserves without the union.

The last remaining UMWA-organized mine in northwestern Colorado is the Deserado mine, an underground mine owned by Blue Mountain Energy. In the last few years, miners report, there have been unsuccessful attempts to organize the UMWA at the Twentymile mine as well as the Colowyo mine, a surface mine owned by Kennecott Energy in northwest Colorado. The Steamboat Pilot reported that many of the workers at Seneca who will be laid off are in their 40s and 50s. Some have worked at the mine for many years, but will not be quite old enough to collect a pension when the mine shuts down. Terry Green, 53, spent 25 years ranching before hiring on. He became a heavy equipment operator at the mine after losing the lease on his ranch, according to the Pilot. He hasn’t worked at the company long enough to accrue much retirement.

Coal production in Colorado has nearly doubled since 1990.

The state of Colorado produced a record 40 million tons of coal last year, up 12 percent from its record in 2003. In 2004 Colorado was the sixth-highest coal producing state in the country. Colorado coal production is expected to reach another high this year with strong demand from utility companies in the eastern United States.

“More of (Colorado’s) coal is going back East because of the tougher mining conditions there and the thinning of coal seams,” Charles Burggraf, group executive of Colorado operations for Peabody Energy Co., told the National Western Mining Conference in Denver February 2, according to the Denver Post. The daily also reported, “Peabody intends to make up for Seneca’s loss by increasing production at the Twentymile mine by 40 percent over the next four years.”

Stronger demand for western coal has nearly doubled the price of Colorado coal. The spot price went from $14 per ton in 2003 to $27 per ton in 2004, according to the U.S. Energy Information Administration.
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