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Coal Company’s Shutdown May Cut Town’s Population In Half

April 20, 1986

HANNA, Wyo. (AP) _ The latest mining disaster to strike this small, windswept coal town on the treeless plains of southern Wyoming threatens to halve its population of 1,600, yet involves no smoke, blast or loss of life.

The crisis - the shutdown of Wyoming’s only underground mine and the layoffs of more than 200 workers - instead stems from an unsuccessful court battle by Carbon County Coal Co. to save a 22-year contract with its only customer.

″They’re leaving as fast as they can find trucks,″ Mayor James Cochrane said of the laid-off miners. ″That’s a problem also. They say you can’t even find a truck to get out.″

″We’re estimating that 800 people will be left″ by summer, he said.

The bust is believed to be the worst for the town since the 1950s, when the Union Pacific Railroad closed a number of its southern Wyoming mines.

Two other companies, which employ smaller workforces at coal strip mines, remain in the area.

But the town’s only pharmacy closed several months ago, and Cochrane expects some service stations will close as well.

″You can look at what it’s done already. It’s definitely going to hurt us in sales tax, cigarette tax and gasoline tax,″ he said. ″The people aren’t here, so there’s no revenue coming in.″ He estimates that Hanna will lose $180,000 to $200,000 in revenues to the exodus.

Not only must the mayor cope with the shutdown’s effect on town revenues. As Carbon Coal’s office manager he didn’t receive his notice with the other miners April 4, but he expects to be laid off early next month. And his wife works for the school system, which is laying off teachers because of the shutdown.

The 100-year-old town was founded by Union Pacific to feed coal to its locomotives, and like similar towns its fortunes have risen and fallen with the demand for coal.

The most recent boom came in the late 1970s and early 1980s, when companies flocked to the area to mine its low-sulfur, high-energy coal.

Carbon Coal began operating in Hanna in 1978 with one customer: Northern Indiana Public Service Co. The utility signed a 22-year contract for 1.5 million tons of coal a year.

At the time, it was a relatively inexpensive deal. However, rising costs caused price increases that made Carbon Coal’s product the most expensive of any purchased by NIPSCO, the utility said in petitioning a federal judge to break the contract.

When NIPSCO signed the contract, it was paying $24 per ton. But by the time it went to court a year ago, at a time when demand for electricity was down, the price had increased to $43 a ton, utility officials said. Delivering the coal raised that to $80 a ton.

Last fall, a federal judge in Hammond, Ind., ruled that NIPSCO could sever its contract, but had to pay compensation.

″It doesn’t seem fair that they win the lawsuit and we lose our jobs and have to shut down,″ said Debbie Gill, who followed her husband, John, to Hanna and Carbon Coal in 1980.

It’s not the first time Gill has lost his job to the economy. He came here from New Mexico after a uranium company released him during that industry’s slump.

Along with losing their jobs, many miners are losing their homes.

Cochrane still owes $49,000 on his 7-year-old house ″and the house next door to me just sold for $13,000. ... There’s no way I can pay for it now.″

″A house that sold for $60,000 five years ago is selling for $15,000. If you can get it,″ Gill said.

Muriel Kitching, 77, has been here since 1940 and thinks the shutdown of mines in the ’50s was worse. ″Whole families, different generations, were broken up.″

But now, she said, ″the worst thing is all these young people have lost their houses and all the equity they put into them. They were promised 20 years work, and they built their future around that promise.″

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