SOMERSET (AP) — A company has laid off about 150 workers at its Elk Creek Mine after abandoning a malfunctioning machine worth millions of dollars that it said is crucial to meeting production goals.
The layoffs disclosed last week at the Somerset facility followed months of efforts by Oxbow Mining to recover the equipment from the mine after concerns arose about spontaneous combustion, The Daily Sentinel of Grand Junction reported last week.
Executive vice president Mike Ludlow said there are no expectations the equipment costing up to $100 million can be recovered.
“We have made a decision that it’s not safe to recover the (machine) so it’s going to be sealed in place,” Ludlow said.
Ludlow said a federal law requiring advance notification of layoffs doesn’t apply because of the emergency nature of the move.
Employees were provided severance payments, he said.
Spontaneous combustion concerns began with the detection of high carbon monoxide levels, suggesting there was underground heating in the mine.
The company withdrew everyone from the mine on Jan. 9 and furloughed some people that month. It later brought back workers to do development work for mining other areas considered safe.
Mine officials said the huge machine can shear away a mine wall to produce as much as 1,700 tons of coal an hour.
It weighs 68 tons and is 800 feet long.
Oxbow’s production capacity has been about 5 million tons a year, but it has been sharply curtailed this year because the machine accounts for about 80 percent of production.
Oxbow, owned by billionaire Bill Koch, has operated the mine since 2001 along the border of Delta and Gunnison counties.
Delta County administrator Robbie LeValley said the mines are an important part of the area’s employment base.
“This represents a significant reduction that will be felt across Delta and Gunnison counties,” she said.
She said Delta County won’t feel the decrease in severance tax and federal mineral lease revenues until next year, but the production drop and layoffs have a more immediate impact on sales-tax revenues.
The company plans to get back to limited production for overseas shipment.
