The mine was deemed too costly to operate while the news also coincided with PacifiCorp signing a long-term coal supply agreement with Utah miner Bowie Resource Partners for its Huntington power station in the state.
“We have evaluated what is in the best interest of our customers and determined it no longer makes economic sense to keep the Deer Creek mine open,” PacifiCorp Energy president and CEO Michael Dunn said.
“The new long-term coal supply agreement with Bowie will supply PacifiCorp with reasonably priced coal so we can continue to provide safe and reliable electric service to our customers.”
The utility said Deer Creek, which started mining in 1974, had an estimated five years or less of reserves.
“Much of the remaining coal has higher ash and sulphur content that has made mine production considerably more expensive and has made it more expensive to comply with air quality standards,” PacifiCorp said.
“Rapidly escalating pension liabilities for the mine’s represented workforce was a large factor in the economic viability of the mine.”
The company aims to close the mine in the early to mid-2015 timeframe pending regulatory approval.