Seneca Coal Company is expected to close its mine by the end of 2005.
The Routt County surface mine employs 100 residents of Routt and Moffat Counties.
"The coal reserves that are economically mineable have been depleted," Seneca spokeswoman Beth Sutton said.
After the depletion of profitable coal reserves, many of the employees will perform reclamation work at the mine, Sutton said.
It is too early to say how many employees will be retained to perform reclamation work, Sutton said.
There is no specific timeline for finishing reclamation, though Seneca Mine expects the work to continue through 2006.
Seneca Mine notified its employees about the closure in November.
When the mine prepares to close, management will evaluate programs to assist employees with resume preparation and interview skills, Sutton said.
The Seneca mine provides Hayden Power Station with an annual average of 1.6 million tons of coal. Since opening in September 1964, Seneca Mine has provided Hayden Power Station with 50 million tons of coal.
Seneca Mine is operated by Peabody Energy, based in St. Louis, Mo. Peabody has a contract to provide Hayden with coal through 2011.
Peabody is renegotiating its contact with Xcel Energy, the power station's operator. The negotiations are confidential, Sutton said.
Xcel Energy intends to continue operating the Hayden plant, Xcel spokesman Mark Stutz said.
"We'll continue to find other sources of coal and have begun to do so already," Stutz said.
For the short term, Xcel could ship coal in by truck. For the long term, the power company is negotiating with railroad company Union Pacific to haul coal in by train.
Rumors have abounded about Seneca Mine's life expectancy, most recently in 2000, shortly after Peabody renegotiated its contract with Hayden.
Seneca always has declined to speculate on the life of the mine, Sutton said. The decision to close the mine was made when Peabody determined the economic reserves had been depleted.
Peabody acquired Twentymile Coal Company last year. Twentymile has 300 employees and produces about 8 million tons of coal annually. Twentymile is perennially one of the largest and most productive coal mines in the United States.