The United Mine Workers of America says the company served notice to union members Monday that it will stop operating its strip mine and coal cleaning plant just north of the remote town on Feb. 3.
Gary Taje (tie), a union spokesman, says of the 450 hourly and other workers at the mine, up to 250 stand to lose their jobs.
He says the company plans to continue operating the underground portion of the mine.
Taje says the company blames low coal prices for the layoffs, which it is calling temporary until prices recover.
Grande Cache Coal officials could not be reached for comment.
Taje said the layoffs will hit the community north of Hinton hard.
"We have a small town here of 4,000 losing 200 to 250 jobs," he said Wednesday. "There is quite a bit of angst among the employees.
"It is not a very nice time here in Grande Cache at all."
Last October Marubeni of Japan and Hong Kong-listed Winsway Coking Coal Holdings Ltd. signed a deal to sell a controlling interest in the coal mine for just $2 to Up Energy Development Group Ltd., a Chinese company.
Marubeni and Winsway Coking Coal Holdings had paid $1 billion for the mine in 2012 when coal prices were booming.
Grande Cache Coal produces metallurgical coal and holds leases covering more than 22,000 hectares in the Smoky River coalfield in west-central Alberta.
Taje said some laid off employees may leave the area to look for new jobs rather than wait for the coal market to recover.
He said there is also a danger workers who aren't laid off will seek more stable employment elsewhere.
"People could end up quitting, looking for greener pastures," he said. "The danger is we are going to lose good people."
— By John Cotter in Edmonton