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A coal firm in Wyoming has announced plans to shrink thermal coal operations by about 50%, shifting toward metallurgical coal and steel production.

Arch Resources Inc. announced Thursday during an investor meeting that its Black Thunder and Coal Creek mines in the Powder River Basin are expected to reduce thermal coal production over the next three years.“We have launched an accelerated effort to evaluate strategic alternatives for our thermal operations, including possible divestiture,” company Chief Executive Officer Paul Lang said. “Simultaneously, we are finalizing plans to shrink the operational footprint at these operations.”

Company officials also reported a net loss of $191.5 million in the third quarter and a $163 million non-cash write down of assets at “several of its legacy thermal operations,” not including Black Thunder coal firm.

The company’s mines in Wyoming have produced about 75 million tons (68 million metric tons) of coal last year, but estimate less than 55 million tons (49 million metric tons) this year, officials said.

The U.S. Mining, Safety and Health Administration reported that the company’s Black Thunder mine produced over 116 million tons (105 million metric tonnes) in 2010 in comparison.

The demand for coal has decreased in recent years with the expansion of affordable natural gas and renewable energy. As a result, mines across the state have seen increasing unemployment and state revenue declines, trends that are only further exacerbated by the coronavirus pandemic.

“Domestic demand for thermal coal is the driver of these decisions,” Wyoming Mining Association Executive Director Travis Deti said. “Unfortunately as demand decreases production does as well. With capacity in the (Powder River Basin) in Wyoming exceeding demand at this point in time, operators across the basin are making difficult decisions on how best to compete for the shrinking customer base.”