Blackjewel CEO confident bankrupt coal operator will rebound

Finance and Business

This photo shows the entrance to Eagle Butte mine seen taped in Gillette, Wyo., Tuesday, July 2, 2019. The CEO of one of the nation’s largest coal producers says he’s confident the company will bounce back despite the shutdown of several mines after it filed for federal bankruptcy protection. (Josh Galemore/The Casper Star-Tribune via AP)

CHARLESTON, W.Va. (AP) — The CEO of one of the nation’s largest coal producers says he’s confident the company will bounce back despite the shutdown of several mines after it filed for federal bankruptcy protection.

Milton-based Blackjewel LLC filed for Chapter 11 bankruptcy protection Monday in U.S. Bankruptcy Court for southern West Virginia. News outlets reported the company cited at least $500 million owed in liabilities.

Blackjewel follows other major U.S. coal producers that have filed for bankruptcy protection in recent years, including Englewood, Colorado-based Westmoreland Coal Co. in October and Gillette, Wyoming-based Cloud Peak Energy in May.

St. Louis-based Peabody Energy Corp. emerged from bankruptcy protection in 2017 and both St. Louis-based Arch Coal and Bristol, Virginia-based Alpha Natural Resources emerged in 2016.

“The entire U.S. mining complex has been impacted by these events,” Blackjewel CEO Jeff Hoops said in a court filing. “The entire industry either has gone through, or is currently going through, a period of financial distress and reorganization.”

Hoops said the company and its partners had insufficient cash to operate and require additional liquidity, especially to pay employees’ wages and benefits.

“We are confident that this restructuring will solidify Blackjewel’s position as a significant participant in the (U.S.) coal market,” Hoops said in a separate statement.

Blackjewel has about 1,100 employees in its eastern division at mines in Kentucky, Virginia and West Virginia. It also operates two mines with about 600 workers in northeast Wyoming.

Other recent bankruptcies in Wyoming’s Powder River Basin coal industry haven’t interrupted mining operations.

But this time, two enormous, open-pit mines operated in Wyoming by Blackjewel — Eagle Butte and Belle Ayr, the fourth- and sixth-most-productive U.S. coal mines — abruptly closed.

“They sent everybody home yesterday. There was no staff on site,” Keith Guille, spokesman for the Wyoming Department of Environmental Quality, said Tuesday.

The department sent inspectors to check for any unattended hazards at the mines. The inspectors had no difficulty accessing the vast sites but weren’t able to reach anybody at either Blackjewel or Contura Energy, Guille said.

Blackjewel holds the license to mine coal while Contura, a company created out of the 2015 bankruptcy of Alpha Natural Resources, holds the Wyoming state mine permits. An attempt by Contura to transfer the permits to Blackjewel has been pending before a Wyoming review board.

Blackjewel recently missed a $1 million tax payment owed to Campbell County.

“This closure is hardest on the individuals who work at these important mines and their families, and our most immediate concerns lay with them,” Wyoming Gov. Mark Gordon said in a statement. “We are not unprepared for this set of circumstances and are eager to do all we can for the hardworking employees of these mines.”

Gordon met Tuesday with local officials and discussed the state’s response to the closings, which included directing the Wyoming Department of Workforce Services to help mine workers.

It wasn’t immediately known whether the company’s entire eastern operations shut down as well. The mayor of Cumberland, Kentucky, told the Lexington Herald Leader at least two miners told him the company closed its local operations Monday.

According to the Mine Safety and Health Administration, Blackjewel and affiliate Revelation Energy LLC were the nation’s sixth-largest U.S. coal producer in 2017, the latest year available.

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Gruver reported from Cheyenne, Wyoming

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