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Cloud Peak Energy to close Gillette, Wyo., office amid industry challenges

In a bid to keep the company "viable," Cloud Peak Energy Inc. announced that it will close its Gillette, Wyo., office and move employees to the Cordero Rojo mine, 25 miles to the south, but underscored that the plan does not currently include layoffs.

The announcement comes as the company suffered a loss of $7.7 million during the first quarter. It reported sales of 12.3 million tons of coal in the first quarter, down from 14.0 million tons in the same quarter a year ago.

"As you are aware, the coal industry continues to be very challenging with reduced domestic demand, overcapacity and associated low prices, making it hard to make a decent financial return," Cloud Peak President and CEO Colin Marshall wrote to his employees, adding that the company's Antelope and Cordero Rojo mines "will increasingly be run as one operation with many support staff covering both mines."

He also noted that the Spring Creek mine will be supported by resources throughout the organization as appropriate. In its earnings report, the company said Spring Creek was the only one of its three mines to increase coal shipments, driven by overseas demand.

Marshall concluded the late May email by saying that while the moves may "create some level of uncertainty for many employees," they "are necessary to make to keep our company viable."

The changes are expected to be carried out over the next few months to minimize disruption, Marshall said.