The company’s Canyon Fuel subsidiary said the decision to eliminate 114 jobs at the mine near Wellington, about two hours from Salt Lake City, was made in response to continued weakness in the region’s coal demand.

Arch officials said Dugout would suspend longwall production at the end of the current panel.

“We regret the need to take this difficult action,” executive vice president of operations Paul Lang said.

“We hope to retain most, if not all, of these valued members of the Canyon Fuel team and plan to offer positions to the affected employees at operations within Arch's national network of mines.”

Lang said while it was dropping production at the operation, there might be additional opportunities in the future for Utah coal both domestically and internationally.

“The next potential longwall panel at Dugout Canyon has been developed and any decision on future production will be based on what market conditions allow,” he said.

While Arch confirmed it did not disclose production targets by its individual mines and did not provide further information on Dugout’s figures to date, it said it had committed and priced 17.8 million tonnes in sales for this year from its Western Bituminous operations.

The operations include Dugout Canyon as well as Sufco, Skyline, Arch of Wyoming and West Elk.

Dugout’s coal sales last year were 2.3Mt.

“The company will provide affected employees with 60 days of wages and benefits in addition to a severance package,” Arch said, adding it would also offer relocation assistance to individuals who fill open company positions in other states.

Arch sold 179Mt of coal pro forma in 2010.