GILLETTE — Contura Energy Inc. plans to reinstate about 500 jobs immediately at the locked out Belle Ayr and Eagle Butte coal mines now that it’s been given a green light to buy the mines from bankrupt Blackjewel LLC on Tuesday.

The sale was approved at about 2:15 p.m. Tuesday. The only things standing in the way of the Wyoming mines and the Pax Surface Mine in West Virginia from reopening under Contura’s banner is a final hearing with the U.S. Bankruptcy Court for the Southern District of West Virginia and an agreement with the federal government over assuming federal coal leases associated with the Wyoming mines.

“The U.S. government has the authority to agree or not agree to the assignment of leases,” said Blackjewel attorney Stephen Lerner of Cincinnati-based Squire Patton Boggs during Tuesday’s sale hearing. “That’s the law.”

He said Contura “has been eminently reasonable” in negotiations so far with the federal government, along with other major creditors like Campbell County. Most of those disputes have been resolved.

Lerner also sent a message to the White House about promises President Donald Trump made to the coal industry leading up to his election in 2016.

“The Trump administration has repeatedly said it wants to do everything it can for the nation’s coal miners,” he said, adding that lack of an agreement on the leases “may be what kiboshes this deal. … If the Trump administration wants coal miners to go back to work, it needs to reach an agreement and needs to reach an agreement right away.”

If the sale to Contura is held up, it will be the second time the company has owned the Eagle Butte and Belle Ayr mines. Contura was created from a group of Alpha Natural Resources creditors that bought the mines as a stalking horse bidder during Alpha’s 2015 bankruptcy. Contura sold the mines to Blackjewel in late 2017, but still retained the state mining permits and about $250 million in reclamation obligations.

Contura sees buying back the Wyoming mines, along with the Pax mine, as a “win-win,” said Damian S. Schaible, a New York-based attorney for the company. “Contura has certain reclamation liabilities and will take care of those reclamation liabilities.”

He said Contura also is focused on getting workers back on the job and producing Powder River Basin coal.

All the affected companies and agencies mostly “all are now on board” with the deal, Schaible said.

That includes Campbell County, which was owed more than $37 million by Blackjewel and Contura from its first time owning the mines. During Tuesday’s sale hearing, an attorney for the county said the county and Contura have come to an agreement about those taxes, but the specifics about that deal weren’t immediately disclosed.

Going forward, Schaible said Contura is committed to paying its taxes owed in full and will “reinstate about 500 jobs immediately, along with creating a $5 million benefit fund for the miners going forward.”

The Contura deal also survived an objection from Komatsu, which owns a pair of large coal shovels at the Belle Ayr and Eagle Butte mines and are worth a combined $22 million to $24 million. During a break in the sale hearing Tuesday, Komatsu and Contura resolved the dispute over the equipment, so the objection was withdrawn.

 

By Greg Johnson

Gillette News Record Via Wyoming News Exchange