Oxbow Mining said Monday it will idle its Elk Creek Mine in Somerset and lay off 115 workers, retaining 20 to look over what was once one of the country’s most productive underground coal mines.
The reduction, reported to the state via a WARN Act notice, follows the loss of 142 jobs in October at the Paonia-area mine, which has struggled since a fire that started one year ago crippled production.
“I am deeply concerned about the effect the Elk Creek Mine closure will have on the families supported by this mine as well as the North Fork Valley community as a whole,” state Rep. Don Coram, R-Montrose, said in a statement.
Mining workers can earn two to three times the average wage in that part of the state, which is about $33,000 a year, according to the Colorado Department of Labor and Employment.
A year ago, the mine suffered a collapse that ignited a fire that continues to burn despite efforts to seal off the oxygen supply. Dangerous air levels have prevented the retrieval of expensive machinery needed to restore production.
The Elk Creek Mine, which Oxbow opened up in 2001, produced more than 6 million tons of low-sulfur coal and employed 350 people at its peak in 2008, when it ranked as one of the country’s largest underground coal operations, according to the company.
“We are idling the mine until we are able to install a replacement longwall and other equipment,” Oxbow Mining president Mike Ludlow said in a statement. “We are working on the engineering and procurement of a replacement longwall and other equipment as quickly as possible.”
The company also is exploring other coal reserves in the Oak Mesa area north of Hotchkiss.
Aside from operational issues, the demand for coal, even cleaner varieties, continues to fall as electricity is increasingly generated from natural gas and renewable sources.
Colorado coal production for the first six months of the year fell 20 percent, to 11.45 million tons, compared with the same period in 2012, according to state figures.
The company said it would honor its agreements to supply coal locally and abroad, using its stockpiles and third-party suppliers.
Oxbow Mining is a subsidiary of Oxbow Carbon, a company founded and run by Bill Koch, brother of David and Charles Koch.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com
