Peabody Energy Reduces Approximately 235 Positions At North Antelope Rochelle Flagship To Continue To Match Production With Demand
ST. LOUIS, March 31, 2016 /PRNewswire/ -- As a result of market conditions, Peabody Energy (NYSE:BTU) has made the difficult decision to reduce approximately 235 hourly and salaried employees from its North Antelope Rochelle Mine in the Powder River Basin to align the workforce with customer needs.
"While our asset position and contracting strategies give us relative strength, we are taking these actions to match production with customer demand," said Peabody President – Americas Kemal Williamson. "We regret the impact of these actions on our employees, their families, and the surrounding communities in the Campbell and Converse county areas."
The reductions affect approximately 15 percent of the workforce at the North Antelope Rochelle Mine. The company is taking steps to ease the transition through severance and outplacement support. Williamson noted the company has regularly worked to minimize job impacts by actively anticipating and adjusting staffing resources, managing contractors and temporary employees, and using natural turnover to lower staffing levels.
U.S. coal industry conditions have remained challenged, impacted by an oversupply of natural gas and mild winter weather. The U.S. coal industry has seen unprecedented shipment declines this year. Heating degree days year-to-date are 17 percent lower than last year, with March heating degree days down nearly 30 percent versus the 10-year average.
While all basins have been impacted, the latest Energy Information Administration production estimates show that the Powder River Basin is faring better than other regions given cost advantages. In addition, the company believes the decrease in shipments is leading to stockpile reductions in excess of prior expectations.
Peabody's Powder River Basin operations employ approximately 1,500 workers with approximately 1,150 employed at the North Antelope Rochelle Mine following these reductions. The company's Powder River Basin operations injected $5.5 billion in direct and indirect economic benefits into the region this past year.
Peabody Energy is the world's largest private-sector coal company and a global leader in sustainable mining, energy access and clean coal solutions. The company serves metallurgical and thermal coal customers in 25 countries on six continents. For further information, visit PeabodyEnergy.com.
Certain statements included on this release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. The Company uses words such as "anticipate," "believe," "expect," "may," "forecast," "project," "should," "estimate," "plan," "outlook," "target," "likely," "will," "to be" or other similar words to identify forward-looking statements. These forward-looking statements are made as of the date the release was filed and are based on numerous assumptions that the Company believes are reasonable, but they are open to a wide range of uncertainties and business risks that may cause actual results to differ materially from expectations. These factors are difficult to accurately predict and may be beyond the Company's control. The Company does not undertake to update its forward-looking statements. Factors that could affect the Company's results include, but are not limited to: supply and demand for the Company's coal products; sustained depressed levels or further declines in coal prices; competition in coal markets; price volatility, particularly in international seaborne products and in the Company's trading and brokerage businesses; adequate liquidity to operate our business and service our debt obligations; impacts of our high leverage and our ability to comply with the covenants in our credit agreements, particularly our leverage ratio and interest coverage covenants; our ability to successfully consummate the planned divestiture of our interest in the Prairie State Energy Campus; the cost, availability and access to capital and financial markets, including the ability to secure new financing; ability to appropriately secure our obligations for reclamation, federal and state workers' compensation, federal coal leases and other obligations related to our operations, including our ability to remain eligible for self-bonding and/or successfully access the commercial surety bond market; customer procurement practices and contract duration; impact of alternative energy sources, including natural gas and renewables; global steel demand and the downstream impact on metallurgical coal prices; lower demand for our products by electric power generators; impact of weather and natural disasters on demand, production and transportation; reductions and/or deferrals of purchases by major customers and the Company's ability to renew sales contracts; credit and performance risks associated with customers, suppliers, contract miners, co-shippers, and trading, banks and other financial counterparties; geologic, equipment, permitting, site access, operational risks and new technologies related to mining; transportation availability, performance and costs; availability, timing of delivery and costs of key supplies, capital equipment or commodities such as diesel fuel, steel, explosives and tires; impact of take-or-pay arrangements for rail and port commitments for the delivery of coal; successful implementation of business strategies, including, without limitation, the actions we are implementing to improve our organization and respond to current market conditions; negotiation of labor contracts, employee relations and workforce availability, including, without limitation, attracting and retaining key personnel; changes in postretirement benefit and pension obligations and their related funding requirements; replacement and development of coal reserves; effects of changes in interest rates and currency exchange rates (primarily the Australian dollar); effects of acquisitions or divestitures; economic strength and political stability of countries in which the Company has operations or serves customers; legislation, regulations and court decisions or other government actions, including, but not limited to, new environmental and mine safety requirements, changes in income tax regulations, sales-related royalties, or other regulatory taxes and changes in derivative laws and regulations; our ability to obtain and renew permits necessary for our operations; litigation or other dispute resolution, including, but not limited to, claims not yet asserted; any additional liabilities or obligations that the Company may have as a result of the bankruptcy of Patriot Coal Corporation, including, without limitation, as a result of litigation filed by third parties in relation to that bankruptcy; litigation, including claims not yet asserted; terrorist attacks or security threats, including, but not limited to, cybersecurity threats; impacts of pandemic illnesses; and other risks detailed in the Company's reports filed with the SEC.
SOURCE Peabody Energy