Sale of two Wyoming coal mines completed

October 22, 2019

The Eagle Butte and Belle Ayr coal mines in Wyoming’s Powder River Basin have been sold to Eagle Specialty Materials, a subsidiary of Alabama-based FM Coal.

The mines had most recently been operated by Blackjewel until that company filed for bankruptcy protection. Contura Energy, which owned the mines until 2017 before selling them to Blackjewel participated in the sale as the mines' permit holder.

“In our view, this transaction represents a best-case-scenario outcome to a lengthy and uncertain process, putting the mines in the hands of an operator with a long-term interest in the Powder River Basin, and getting hard-working coal miners back on the job,” Contura chief executive officer David Stetson said in a release.

The Associated Press reported that under the sale, Contura will pay about $90 million to FM Coal subsidiary Eagle Specialty Materials, which will assume about $238 million in reclamation liabilities in Wyoming and at dozens of sites in Appalachia.

Contura also paid $13.5 million to settle a tax bill in Wyoming.

West Virginia-based Blackjewel furloughed more than 500 employees in Wyoming when it filed for bankruptcy July 1.

Belle Ayr and Eagle Butte near Gillette were the fourth- and fifth-most-productive U.S. coal mines in 2018, respectively, but mining slowed significantly with only a small number of employees left at the vast openpit mines.

Several coal-mining firms in Wyoming and elsewhere have gone bankrupt in recent years amid competition from natural gas and renewable energy sources and declining demand for coal to fuel power plants.

Blackjewel interim CEO David Beckman said the sale in Wyoming will result in the mines returning to full production and Blackjewel paying outstanding wages due its employees as of July 1.

"The completion of this sale marks the end (of) what has undoubtedly been an arduous sale process with exceptional results," Beckman said.
It was the largest and last major asset sale of Blackjewel's bankruptcy process, according to the company.



Related article search: