CMA Statement on Idling of Elk Creek Mine

I know that all of you join me in expressing our concern and support for the employees of the Elk Creek Mine, following yesterday’s announcement about the idling of the Elk Creek Mine and the issuance of WARN notices to 115 employees, who will be laid off while the mine management works to procure new longwall mining equipment lost during a geologic event and subsequent mine fire.   The company is also studying the possible development of reserves near Hotchkiss.

The Elk Creek Mine produced nearly 3 million tons of coal in 2012 before ceasing operations, about 10 per cent of the state’s production for that year.   This mine, like almost all of the others in Colorado, pays millions of dollars in royalties and taxes that support public schools and important state government functions.    The state’s ten coal mines generated more than $1.1 billion in revenue in 2012, and more than $2.75 billion to the state’s economy.   Coal mining accounts for nearly 24,000 jobs in Colorado overall.

As the company considers its options, CMA acknowledges what is already abundantly clear:  The  mining business is challenging enough without government intervention in energy markets, either through state legislation or federal initiatives designed to curb coal use and award markets to higher cost and less competitive energy sources.   Although times are challenging now, coal use worldwide is still growing and Colorado’s high quality, clean coal reserves will play a role in serving these markets, lifting nations out of poverty and to prosperity, just as coal use has helped make the United States the world’s leading economy.

The company news release is reprinted below.

ELK Creek Coal Mine temporarily idled
12/2/2013: SOMERSET – Oxbow Mining, LLC (“Oxbow Mining”), a subsidiary of Oxbow Carbon LLC, issued a WARN Act Notice to its employees as well as state and local officials on December 2, 2013, that the Elk Creek Coal Mine will be temporarily idled. The idling will affect approximately 115 employees. The company will retain a workforce of approximately 20 people to maintain the mine and prepare for future operations.

Mike Ludlow, President of Oxbow Mining, said the Elk Creek Mine was unable to fully recover from a previous geologic event and subsequent mine fire. Conditions forced the mine to abandon its longwall and other equipment.

“We are idling the mine until we are able to install a replacement longwall and other equipment,” said Ludlow. “We are working on the engineering and procurement of a replacement longwall and other equipment as quickly as possible.”

Oxbow Mining has been producing coal in the North Fork Valley since 1995. The company opened the Elk Creek Mine in 2001 and currently provides a high Btu, low sulfur coal for both the domestic and international markets.

“Oxbow Mining has successfully supplied western bituminous coal into Asia and Latin America and we will continue to supply and expand our customer base to provide this high quality coal worldwide,” Ludlow said. “While the Elk Creek Mine is idle, Oxbow will continue to supply customers with a blend of stockpile coal and coal from third parties.”

Oxbow Mining, also supplies domestic stoker coal for residents in the North Fork Valley. “We intend to honor our commitment to the local market through the winter,” said Ludlow.

At its peak in 2008, the Elk Creek Mine was one of the top producing underground mines in the country, producing more than six million tons of super compliant, low sulfur coal annually. The mine employed more than 350 employees at the height of production.

Oxbow Mining, also is continuing to work on developing additional coal reserves in the Oak Mesa area of the North Fork Valley.

For more information contact:

Brad Goldstein, Corporate Affairs Director, at 561-907-5400.