By Dennis Webb
February 9, 2020 - Colorado’s coal production dipped slightly in 2019 from the prior year, according to data from the state Division of Reclamation, Mining and Safety.
The agency reports that the state’s six active mines produced about 13.63 million tons between them last year. That compares to about 14.28 million tons in 2018.
Arch Coal’s West Elk Mine in Gunnison County in the North Fork Valley continues to lead in production, at about 4.16 million tons. But it also contributed to the drop in statewide production, as it had produced about 4.64 million tons in 2018.
Peabody’s Foidel Creek (Twentymile) Mine in Routt County saw its production drop to 2.54 million tons from about 3.05 million tons in 2018.
The state report shows that nearly 1,100 coal miners currently work in the state, including 335 at West Elk and 174 at Foidel Creek. Foidel Creek employed 266 at the end of 2018, and West Elk, 294. About 1,160 coal miners worked statewide at the end of 2018.
The Trapper Mine near Craig produced 1.95 million tons last year, and the Colowyo Mine, also in Moffat County, produced about 1.6 million tons. That compares to 2.14 million and 1.47 million tons in 2018, respectively. The two mines supply the Craig Station power plant. Colowyo employs 188 miners, and Trapper, 150.
The Deserado Mine in western Rio Blanco County produced about 2.72 million tons last year, up from 2.36 million tons in 2018, and it now is the second-largest producer in the state. It supplies a power plant in northeastern Utah and employs 160 miners.
The King II Mine in La Plata County produced about 658,000 tons last year, up from about 615,000 acres in 2018. It employs 89 workers.
Colorado’s coal mine industry has been struggling, with two major mines having closed in the North Fork Valley in the last decade. Both the Colowyo and Trapper mines face closure by 2030, and perhaps as early as 2026 in the case of Trapper, after Craig Station’s operator, Tri-State Generation and Transmission Association, announced plans to shut down all the plant’s generating units over the coming decade.
The industry faces challenges including concerns about the climate-change impacts of coal-burning, low-priced natural gas that is being increasingly used for electricity generation, pressure on utilities to use more renewable energy, and decreasing costs for renewable power.
In November, a federal judge halted Arch Coal’s expansion of its underground mine over the federal government’s failure to consider requiring flaring of the methane that would be produced, which would reduce greenhouse gas impacts.
In its latest quarterly financial report, Arch Coal said it encountered lower export-related pricing in the fourth quarter for its West Elk coal.
In June, Peabody and Arch announced they had agreed to combine four Peabody mines and three Arch Coal locations in Wyoming and Colorado, including Foidel Creek and West Elk, into a joint venture. The goal is to make coal more competitive against natural gas and renewable power, due to cost-saving operational efficiencies. Peabody would own two-thirds of the joint venture, and Arch Coal, one-third.
Peabody said in its quarterly earnings news release this week that it anticipates a decision from the Federal Trade Commission on the proposed joint venture in the first quarter of this year.
Peabody this week announced a fourth-quarter loss from continuing operations of $290.2 million, while Arch Coal lost $8.6 million for the quarter. Peabody said it has sharply reduced capital expenditures for this year and suspended dividends for shareholders.