Exports from Usibelli, the only operating coal mine in Alaska, will come to a halt for the rest of the year as sustained drops in global price and demand force the temporary closure of the coal loading facility in Seward, officials from the mine announced on Tuesday.
As exports have slowed in the past year, the number of workers at the facility has dwindled to eight and the company is planning additional layoffs. Officials from Usibelli and subsidiary Aurora Energy Services, which operates the facility on behalf of the Alaska Railroad, met with employees on Tuesday to discuss the process for putting the facility into idle mode.
Aurora will retain a small crew at the facility through the remainder of the winter into next year, said Rob Brown, general manager of Aurora and vice president of business development at its parent company.
"We're keeping some of our crew in order to keep things maintained and have all the components in a ready state," Brown said. "It's a hard thing to see such great employees and good quality individuals have to go through this."
In 2011, Usibelli exported close to 1.2 million tons of coal, but that number had fallen 57 percent by 2014 to 513,000 tons. This year the company exported 150,000 tons to Japan. No shipments have gone to other regular customers in Chile or South Korea.
"An oversupply of coal in the global market, as well as the strength of the U.S. dollar, has created less demand and a drop in price for Alaska coal," Brown said.
The drop in exports will mean further cuts into freight revenues for the Alaska Railroad. The railroad transports coal from the Healy mine to Seward for loading onto ships bound for markets abroad.
In addition to exports, the Usibelli mine supplies coal to Alaska's seven coal-fired power plants in the Interior. No layoffs are planned for the mine, Brown said.
Brown said the plant has been idled before, with the most recent extended closure in 2004 when there was no coal traffic at all.
"This year it's going to be offline a little bit longer ... but we anticipate at some point the market will return like it has a number of times before," he said.