Eagle Butte

There has been reduced activity at the Eagle Butte coal mine north of Gillette since its parent company, Blackjewel LLC, filed for bankruptcy and abruptly closed it and the Belle Ayr mine in Campbell County on July 1. Contura Energy has made a payment that signals the closing of a deal to sell the mine, along with the Belle Ayr mine, to Eagle Specialty Materials.

If or when Eagle Specialty Materials is ready to hire back former Blackjewel LLC coal miners and ramp up production again, Bob is ready.

“I have already called them when they sent us a letter asking if we would come back,” he said. “I said I would go back.”

A haul truck driver for Blackjewel, Bob is one of nearly 600 Eagle Butte and Belle Ayr mine employees who were abruptly locked out of their jobs without notice July 1.

Not his real name, Bob asked not to be identified because he’s already found another job, but said he would welcome a call back to his job mining coal. He said he wants to be fair to his new employer and not leave that company in a bad way, unlike what happened with Blackjewel.

“If I would get called back, that would be great,” Bob said. “But I want to leave where I’m at on good terms, too. … The way this all happened (with the lockout) left a lot of people hurt.”

Bob said he held out as long as he could in hopes the mines would reopen sooner, but in the end had to take another job, something he said many of his coworkers also have done.

“It’s been really tight money-wise and I just got this other job not even a month ago,” he said. “We drained our savings pretty much all the way, took money out of the 401(k), but you gotta do what you gotta do.

“I’ve run into people who say it’s been really bad for them. They’ve got other jobs and there have been some who went up to Montana and, from what I heard, the ones who got picked up at the other mines (in the Powder River Basin) actually got more money. That’s good for them.”

Just how close that call-back may be coming for Bob and hundreds of other Campbell County coal miners is anyone’s guess. But a significant sign came Friday that it may be soon.

County collects

Sources close to the companies involved say Eagle Specialty Materials may be close to closing its deal to assume ownership of the Eagle Butte and Belle Ayr coal mines.

While an official announcement about the status of the sale hasn’t been made, Campbell County received a $13.5 million payment from Contura Energy on Friday afternoon. That payment was part of the sale deal with Contura Energy Co. to settle a $15.1 million ad valorem tax bill with the county. The $13.5 million was to be paid upon the deal with Eagle Specialty Materials closing.

Campbell County Commission Chairman Rusty Bell confirmed Friday afternoon 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 said he hasn’t heard yet if a promised $1.8 million payment had been made to cover outstanding wages and benefits still owed to Powder River Basin coal miners who were locked out Blackjewel 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 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.”

A quick rundown

When the deal officially closes, it also will end 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 and 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 bills from its 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 about $100 million worth of reclamation of some of Blackjewel’s smaller defunct operations in Appalachia.

Eagle also will pay Blackjewel $16.2 million in cash; $22 million to Blackjewel’s senior debt holder, Riverstone Credit Parters; pay any unpaid bills and debts incurred during the bankruptcy up to about $4.3 million; and repay 50% of the county production taxes Blackjewel owes.

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