Decker cuts 70 workers, parent company files for bankruptcy
Decker cuts 70 workers, parent company files for bankruptcy
By Kristen Czaban
The Sheridan Press
Via Wyoming News Exchange
SHERIDAN — Decker Coal Company has cut more than 70 employees from Decker Mine and announced the mine's parent company, Lighthouse Resources Inc. voluntarily filed for Chapter 11 bankruptcy Wednesday.
According to the bankruptcy filing in U.S. Bankruptcy Court for the District of Delaware dated Dec. 3, 2020, the bankruptcy also incorporates affiliates of Lighthouse Resources, which include Big Horn Coal Company, Rosebud Coal Sales Company, Decker Holding Co., LLC, Decker Coal Company, the Millenium Bulk Terminal in Longview, Washington, and others.
“In light of the challenging market conditions and other impacts on our business from COVID-19, we have been required to reduce costs and reorganize our business resulting in the reduction of our workforce in Montana,” said Everett King, Lighthouse’s CEO, in a statement. “We are deeply saddened by this impact on individuals, families, and communities. A court-supervised reorganization process is necessary for Lighthouse and its stakeholders and we have no alternative.”
According to the bankruptcy filing, prior to the filing, the workforce included approximately 167 employees for Lighthouse Resources, the Millennium Bulk Terminal in Longview and Decker Coal. On Dec. 2, though, the companies terminated 76 employees, leaving only 91 as of the petition date. Of those remaining, 11 are employed by Lighthouse Resources, 21 by MBTL and 59 by Decker Coal.
Decker Coal General Manager Leonard Wolff confirmed Thursday morning 64 employees who were out on furlough and an additional 12 overhead employees were laid off from Decker Coal Mine.
According to the bankruptcy filing, Lighthouse and its subsidiaries owe approximately 1,500 creditors, including $6.2 million to the Big Horn County Treasurer, $4.5 million to the Montana Department of Revenue and $3.3 million to the Office of Natural Resources. In total, the top 30 creditors are owed $19.91 million.
The filing also indicates the Decker Mine typically ships 2.5 million tons of coal to DTE Electric Company each year, but that Lighthouse focused on markets in the Indo-Pacific region. The lack of port capacity on the West Coast — an issue that has been tied up in courts for years — has restricted access for Decker Mine and others to sell their product.
“Currently, the Debtors’ cost to produce coal from the Decker Mine exceeds the sale price in the DTE Sales Agreement due to insufficient production volume to cover fixed costs,” the bankruptcy filing states. “Continuing to operate the Decker Mine is not economically feasible.”
In addition, DTE will no longer purchase coal from Lighthouse or its subsidiaries beyond 2021, leaving the company with no buyers for coal at the Decker Mine.
The bankruptcy plan seeks to restructure the company and its subsidiaries, intending only LHR Coal and its subsidiaries, which includes Decker Holding Co. and therefore Decker Coal Company, to survive.
According to information posted on the Lighthouse Resources website, court-supervised operations will continue at reduced levels at the Decker Mine in Montana. In addition, operations at the MBTL will continue without reduction and interested parties will have the opportunity to acquire Millennium’s rights under the court-supervised process. The filing indicated the company’s interests at the former Big Horn Coal Company site would likely be sold as farming and ranching land. Additionally, Lighthouse Resources has a joint venture interest in Black Butte Coal Company in Wyoming. Black Butte has not filed a Chapter 11 petition and will continue with normal operations.
The cuts announced Wednesday are just the latest in similar news coming from the Powder River Basin, with hundreds of miners losing their jobs in Wyoming and Montana this year.
“The closure of Decker mine is extremely devastating and it’s a stark reminder that we must increase our efforts to economically diversify our state economy to provide good paying blue-collar jobs while simultaneously fighting on behalf of fossil fuel industries in Wyoming,” Rep. Cyrus Western, R-Big Horn, said Thursday morning.
Data from the U.S. Energy Information Administration shows year-to-date coal production in the U.S. has dropped 24.7% compared to last year, totaling just 489.3 million short tons. Wyoming largely relies on the energy industry for revenues, and its decline has contributed to the state’s economic instability in recent years, which was seen most dramatically as Gov. Mark Gordon has worked to reduce the state’s budget by nearly $1 billion compared to his first budget upon taking office.