Wyoming News Exchange

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Wyoming News Exchange

Contura pays county taxes in sign of finished mine deal

 

By Greg Johnson

Gillette News Record

Via Wyoming News Exchange

 

GILLETTE — Eagle Specialty Materials has apparently closed its deal to assume ownership of the Eagle Butte and Belle Ayr coal mines in Campbell County and could be days away from hiring back some of the nearly 600 employees who have been out work since July 1.

While an official announcement of the deal’s closing hasn’t yet been made, Campbell County has received a $13.5 million payment from Contura Energy. It’s part of a settlement Contura had to satisfy a $15.1 million tax bill with the county that was to be paid upon the deal with Eagle Specialty Materials closing.

Campbell County Commission Chairman Rusty Bell confirmed Friday afternoon that the payment had come through.

“We’ve got that money, it came in about an hour ago,” he said at about 2:40 p.m. “It’s exciting to see things moving forward.”

Bell also said he hasn’t heard yet if Contura also has made a promised $1.8 million payment to cover outstanding wages and benefits still owed to Powder River Basin coal miners who were locked out when former mine owner Blackjewel LLC filed for bankruptcy.

“We want to make sure that $1.8 million for the back pay also gets paid,” he said. “That’s important.”

He also said that the county is looking forward to working with ESM and its parent company, Alabama-based FM Coal.

“Let’s see something good happen going forward with a new company and see if they can operate it better than the others, Blackjewel and Contura,” Bell said. That shouldn’t be difficult because “the bar’s pretty low there. … We like the mine plan ESM has and we like that those mines aren’t going to be funneling money anymore to whatever hole Blackjewel is.”

The closing also ends a volatile chapter in the lives of the mines, which have been among the nation’s most productive for decades.

Contura bought the mines in 2015 when Alpha Natural Resources auctioned them off in its Chapter 11 bankruptcy reorganization. Contura then sold the mines to Blackjewel in a deal where Blackjewel didn’t pay any money up front, but instead assumed debt associated with the mines.

Less than two years later, Blackjewel had not only failed to pay that assumed debt, it also piled up more than $100 million of its own in unpaid royalties, taxes and services to vendors. A bankruptcy filing the morning of July 1 was followed hours later by a sudden shutdown of all Blackjewel operations in Wyoming, Kentucky, Virginia and West Virginia. The move also locked out about 1,700 workers, including 580 at the Wyoming mines.

Still on the hook for more than $230 million worth of reclamation obligations attached to Eagle Butte and Belle Ayr, Contura was the winning bidder during Blackjewel’s bankruptcy auction. But the company couldn’t come to an agreement with the federal government over unpaid royalties and another deal was struck with ESM and FM Coal.

In addition to paying the $13.5 million to Campbell County, Contura also agreed to pay Eagle Specialty Materials $90 million to assume the reclamation obligations. ESM also has agreed to guarantee the reclamation of some of Blackjewel’s smaller defunct operations in Appalachia.

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