Owner Of Western Colorado Coal Mine Declares Bankruptcy

Photo: The West Elk Mine (Courtesy)
A construction site above the West Elk Mine in Gunnison County, Colorado.

Facing declining coal prices and softening demand in 2016, St. Louis-based Arch Coal filed for Chapter 11 bankruptcy protection on Monday. The company owns and operates West Elk Mine near Somerset in Gunnison County.

In a statement, Arch Coal said it expects mining operations and customer shipments to continue "uninterrupted throughout the reorganization process." The company said wages, health care and other benefits will be paid "without interruption in the ordinary course of business."

In Colorado, coal production is at a 21-year low, according to the Energy Information administration. Across the country, coal production also bottomed out as energy company sought to replace coal with cheaper and cleaner-burning natural gas. The Obama Administration's Clean Power Plan recently adopted could mean this trend continues in 2016 and beyond.

Colorado Mining Association President Stuart Sanderson said that high-paying coal jobs continue to be an economic anchor in Paonia and the North Fork Valley where the West Elk Mine is located.

"Everybody should be concerned about the impact that these regulations -- both state and federal -- are having on industries that have supported Colorado for 100 years," he said. "There is no need to destroy our economy. And yet that is exactly what the Obama Administration is doing."

The environmental group WildEarth Guardians used the Arch Coal bankruptcy as a chance to call on the company to divest its assets, and relinquish federal coal leases.

“There is no future for coal, and it’s time for Arch Coal to be honest about this with its shareholders, its employees, and the American public who sustain so much of the company’s operations,” said Jeremy Nichols, WildEarth Guardians’ climate and energy program director in a press release.

In Colorado, the West Elk Mine and Arch Coal are awaiting the decision from U.S. Forest Service Officials on a proposed Roadless Rule exemption, which would allow coal exploration on 19,700 acres of federal land in the North Fork Valley. Public comment will be accepted through Jan. 15 on the topic, with a decision expected sometime this spring.