Officials view coal mine sale as positive
November 24, 2015
Steamboat Springs — Routt County officials view the anticipated sale of Twentymile Coal Co. to Bowie Resource Partners as a positive development.
“Nationally, coal might be on the decline, and there might be some day in the future when there is no coal industry, but my hope is we’re the last coal mine standing,” Routt County Commissioner Tim Corrigan said Tuesday.
On Friday, Peabody Energy announced it was selling Twentymile and the El Segundo and Lee Ranch mines in New Mexico for $358 million in cash, as well as the assumption of certain liabilities. The transaction is expected to close by the first quarter of 2016, and Bowie will become the largest bituminous coal producer in the western United States. With 1,700 employees operating at five mining complexes in Colorado, New Mexico and Utah, Bowie’s production will double to 25 million tons per year.
Bowie’s corporate offices are located in Louisville, Kentucky. Its operations office is in Grand Junction.
Despite a steady decline in production due to decreased demand for coal, Twentymile in February had 335 employees and remained one the valley’s largest employers. About the same time in 2014, Twentymile employed about 400 full-time employees.
Likewise, Bowie has not been immune to having to downsize its workforce.
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The Denver Post reported that, in 2014, the termination of a contract and a weak regional coal market led to Bowie laying off 150 miners at the Bowie No. 2 mine in Paonia. This fall, Bowie announced 78 full-time employees and 19 contractors at Bowie No. 2 would be laid off while the company developed new mining infrastructure and evaluated the demand for coal.
Steady rumors in recent years regarding Twentymile’s future in Routt County illustrates its perceived importance in the Yampa Valley. At times, with Peabody’s stock prices plummeting, there were rumors the mine was going to close.
“We live with that worry on an ongoing basis,” Corrigan said.
According to a news release from Bowie, all of Twentymile's employees are expected to remain and become Bowie employees.
“I view it as a real positive development,” Corrigan said. “It’s hard to believe that Bowie would purchase the mine without the intent of continuing production.”
According to a news release, purchasing the mines will allow Bowie to successfully compete with natural gas concerns. Bowie is banking on the existing long-term contacts the mines hold. For example, Twentymile has a contract with Hayden Station, which is currently adding $160 million worth of technology to reduce emissions.
"These acquisitions fit the vision and model that were the genesis of Bowie as we continue to buck the industry trend with long-term contractual partnerships with our customers and secure margins in our niche," Bowie Executive Chariman John Siegel said in a news release. "The El Segundo and Twentymile mining complexes have exemplary safety and productivity records, long-term relationships with domestic customers and superior reserve quality that combine to render this an accretive and synergistic acquisition for us that will create economies of scale and lower cost.”
County Commissioner Cari Hermacinski said Tuesday she had been hearing for months that Bowie was looking at buying Twentymile. She added she has talked to a couple of the mine’s employees.
“They viewed this as a good transition,” Hermacinski said. “If the people working out there think it’s a good thing, it probably is.”
In recent years, about two-thirds of Twentymile’s employees have lived in Moffat County.
County Commissioner Chuck Grobe also said he was glad to hear of the sale.
“Personally, I think it’s a good thing for the area,” Grobe said. “It brings a lot of stability.”