It takes something pretty spectacular to take the attention of the Gillette community away from the bankruptcy of one of the Powder River Basin’s largest coal producers and employers.
Cloud Peak Energy has been methodically moving through its Chapter 11 reorganization and sale since May 10, going through all the normal procedures in a corporate bankruptcy. Unfortunately, these are procedures Campbell County residents and coal workers are all-to-familiar with after having watched Alpha Natural Resources, Arch Coal Inc. and Peabody Energy Corp. all go through Chapter 11 reorganizations over the past four years.
As the only pure PRB play, Cloud Peak operates the Cordero Rojo and Antelope mines south of Gillette. Antelope is the third-largest producing mine in the basin behind only North Antelope Rochelle and Black Thunder.
More than 500 motions have been filed so far in Cloud Peak’s bankruptcy case, which comes to a head this week. The bid deadline for anyone interested in buying any of the company’s assets was last week and an auction has been set for Thursday. With a sale hearing of Aug. 7 set, we could be in the final days of Cloud Peak operating in the PRB.
Something pretty amazing must be going on that something with the potential to significantly change the local coal industry can fly under the radar.
That something has been Blackjewel LLC, which has been spectacular in how hard and fast the company crashed and amazing in how unprecedented its bankruptcy has unfolded.
It wasn’t enough to just file for Chapter 11 and keep operating business as usual like all the other PRB bankruptcies. Blackjewel rushed into it, went to court with a shaky $20 million financing plan that fell through at the last minute and abruptly closed down its 32 operations in four states, including the Belle Ayr and Eagle Butte mines in Campbell County.
Information gleaned from multiple emergency hearings with the federal bankruptcy court has shown just how disorganized, inept and potentially illegal Blackjewel’s former management team was under the leadership of former CEO Jeff Hoops.
To say mismanagement played a large role in the Blackjewel fiasco would be an understatement. You only have to look at the four other PRB bankruptcies to know that. In all of those, the mines were never shut down, employees were paid and appropriate taxes to the county, state and federal governments were maintained (for the most part).
While we may not always see eye-to-eye with the issues pressed by the Powder River Basin Resource Council, we should be grateful to the Sheridan-based advocacy group. Because the Resource Council challenged transferring the mining permits to Blackjewel when it took over operations of the mines, the state has a much better grip on making sure its $250 million in reclamation obligations can be met. The argument the Resource Council used was that Blackjewel was a bad company, and the state would be better off without it as a coal operator.
As we prepare to potentially see new owners for the four mines being sold by Cloud Peak and Blackjewel, let’s make sure we’ve learned our lesson and not allow another bad company a chance to be equally spectacular and amazing.