Westmoreland lays off workers at San Juan Mine

Coal company official confirms layoff but declines to comment on how many workers were laid off or what kinds of jobs were cut

James Fenton
Coal moves on a conveyor belt and is deposited at a collection site on Jan. 13 at the San Juan Mine in Waterflow.

FARMINGTON — An unconfirmed number of workers at San Juan Mine have been laid off.

Joe Micheletti — executive vice president of operations for Colorado-based Westmoreland Coal Co., the new owners of the underground longwall mine — confirmed in a phone interview on Wednesday that there was a workforce reduction at the mine.

Micheletti declined to specify how many workers were laid off or comment on the types of job duties that were cut. The mine employs about 480 workers, according to Daily Times archives, but that number is uncertain since Westmoreland took over.

San Juan Mine was owned and operated by BHP Billiton New Mexico Coal until Feb. 1, when BHP sold the mine for about $127 million to Westmoreland San Juan, a subsidiary of Westmoreland. PNM Resources, the parent company of Public Service Company of New Mexico, financed a $125 million loan to Westmoreland so the company could buy the mine.

In an interview with The Daily Times earlier this year, Micheletti declined to talk about workforce levels before the transaction was finalized. He said on Wednsday that the company might be more forthcoming over workforce projections after its second quarter.

He said workforce reductions are strictly "between us and our employees," and that Westmoreland Coal is "adamant that (it communicates) with our employees directly."

"That’s the way we go about our business. We don’t want to go about it any other way," Micheletti said. "We gave some people notification that we’re making some adjustments to the workforce, and we very much want to apply the golden rule and talk to those people and the workforce only."

All coal produced at San Juan Mine supplies the mine’s sole customer, San Juan Generating Station. The coal-fired power plant is adjacent to the Waterflow mine on its western border and is operated by PNM, the largest electric provider in the state.

Westmoreland has an agreement to continue as sole supplier to the generating station through 2022.

Dan Ware, BHP spokesman, said jobs were a priority in the sale agreement.

"We are confident that Westmoreland Coal is following the guidelines of the sales agreement," Ware said. "Due to confidential nature of the agreement, we can't discuss this further."

Navajo Mine, which is just south of San Juan Mine in nearby Nenahnezad, was sold by BHP to Navajo Transitional Energy Company for $85 million in December 2013.

NTEC spokesman Erny Zah said jobs at the nearby Navajo Mine are intact.

In December, NTEC entered into a 15-year contract with Bisti Fuels Co. — a subsidiary of North American Coal Corp. — to operate Navajo Mine after BHP ends its operating contract there by the end of 2016.

"The majority, if not all, of the workers are protected by a collective bargaining agreement, so we expect nearly every job to remain intact and remain protected moving forward," Zah said.

Navajo Mines employs a total of 350 people, Zah said.

Zah said NTEC's operator agreement with North American Coal prioritized preserving jobs and honoring pre-existing tribal workforce protection laws, as well as ensuring Navajo preference with its employees.

"We want the new miner to know that we work with the community," Zah said. "Those community members are our primary stakeholders, so we wanted a company that understood that. That's why North American was selected."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.