By Greg Johnson, Gillette News Record
Via- Wyoming News Exchange
GILLETTE — Nearly 600 Blackjewel LLC coal workers in Wyoming and West Virginia may see a monthlong forced layoff end soon after the company has agreed to sell a trio of mines to Contura Energy Inc.
An agreement to sell the company’s flagship Eagle Butte and Belle Ayr mines in Campbell County, along with the Pax Surface Mine in West Virginia, was one of the notable outcomes of a marathon three-day Chapter 11 bankruptcy auction that began Thursday morning and concluded about 8:45 p.m. Saturday.
After a competitive bidding process, Contura will buy the three mines for $33.75 million cash and assume $251 million in reclamation obligations. The winning bid reflects an increase of $13.25 million from Contura’s initial stalking horse bid.
The sale of Blackjewel’s Western assets was relatively straightforward and Contura has already said it plans to reopen the mines and begin producing coal again. For the company’s dozens of Eastern operations and its 1,100 locked out employees, it’s not immediately clear which mines, if any, may or may not reopen.
According to an auction update filed Sunday morning with the U.S. Bankruptcy Court for the Southern District of West Virginia, some Eastern assets were sold to a handful of combined bidders.
Overall, the Eastern assets were sold for about $9 million in cash and another $50.4 million in credit bids from Blackjewel debt holders and royalty agreements. The successful bids also assume $357.3 million in liabilities associated with the properties.
The successful bids will need court approval before the sales can close. A sale hearing was scheduled for Monday morning.
Here’s a breakdown of Blackjewel’s winning auction results for Eastern assets:
Kopper Glo Mining LLC: Will buy Black Mountain and Lone Mountain; agreed to pay $7.55 million in cash and royalties with a net present value of $9.1 million as a credit bid; assume $38.4 million in asset retirement obligations (ARO);
Rhino Energy LLC: Will buy Virginia Subdivision Assets; agreed to pay $850,000 and $208,000 in royalties; assume $6.07 million in ARO;
Coking Coal LLC: Will buy the Pardee mine; agreed to pay $50,000 and royalties with a net present value of $2.419 million; assume $1.2 million in ARO;
Tye Fork Coal Co. Inc.: Will buy the mine designated LM6; agreed to pay $400,000; assume $75,000 in ARO, and
Javelin Global Commodities: This company owns 30% interest in Blackjewel Marketing and Sales; will pay $125,000; another $1.4 million in cash will be paid by Blackjewel Marketing and Sales as a settlement to resolve various disputes between BJMS and the company.
The company’s senior credit holders also are allowed to bid dollar-for-dollar what they’re owed without putting up actual cash.
Mark Energy LLC bid $2,000 cash for the mine designated LM8;
Dean-McAfee Lenders proffered a credit bid for Harlan County, Kentucky, assets. There were no other details about this bid in Sunday’s filing, and
John Deere Construction and Forestry Co. made a credit bid on equipment it claims is subject to a valid lien.
A Blackjewel lawyer has said in previous court hearings that any assets not sold at auction would be converted to a Chapter 7 bankruptcy for liquidation.