Eagle Specialty Materials has closed its deal to buy the Eagle Butte and Belle Ayr coal mines in Campbell County.
The sale becoming final was announced Monday morning and closes a chapter of a messy Blackjewel LLC bankruptcy process that has included locking out 1,700 employees without notice and owed significant unpaid wages, a failed auction sale and the ouster of Blackjewel's former CEO, Jeff Hoops. It also revealed a federal criminal investigation into possible fraud by Blackjewel and its senior management.
As Contura Energy Inc. was announcing the closing of the sale to Eagle Specialty Materials early Monday morning, some Powder River Basin coal miners were already reporting they've received calls about going back to work at the local mines.
Contura originally owned the Wyoming mines after spinning off from Alpha Natural Resources as a stalking horse bidder in its 2015 bankruptcy. In December 2017, it sold Eagle Butte and Belle Ayr to Blackjewel in a transaction that had Blackjewel assume Contura's debt associated with the mines.
Eighteen months later, Blackjewel not only hadn't paid the debt it assumed, the debt had grown to more than $100 million owed in federal, state and local royalties and taxes along with millions more owed to vendors.
Contura bought the mines back from Blackjewel this past summer during its bankruptcy sale, but couldn't come to an agreement with the federal government over unpaid royalties needed to close that deal. Instead, Contura found another buyer in Eagle Specialty Materials.
“Closing this deal with Eagle Specialty Materials brings about a positive result for our company and the many stakeholders involved in this transaction,” said David Stetson, Contura's chairman and CEO. “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.”
Monday's announcement follows a Friday afternoon $13.5 million payment from Contura to Campbell County, which the company had agreed to pay to settle $15.1 million worth of unpaid production taxes.
Monday's announcement from Contura says the closing happened Friday.
As part of the deal, Contura agreed to pay ESM $90 million to assume the $237 million worth of reclamation obligations attached to the mines. Contura paid $81.3 million of that upon closing and will put another $8.7 million into an escrow account that will be used to make a payment on a federal royalty claim against Contura Coal West.
This is a developing story and will be updated. See Tuesday's print edition of the Gillette News Record for more on the deal.