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Eagle Butte

Tourists take photos of a coal truck as it makes its way to the processing area at Eagle Butte coal mine north of Gillette in 2015. The mine's owner owes Campbell County more than $8.6 million in delinquent taxes.

The company that bought the Eagle Butte and Belle Ayr mines is more than $8 million delinquent for taxes owed in Campbell County, most of which goes to local schools, county officials said.

Blackjewel LLC owed approximately $8.6 million on Sept. 1. The taxes are mostly for production in 2017, but also personal property taxes, said Campbell County Treasurer Rachael Knust.

The final deadline for those taxes fell on Nov. 10.

As the delinquency date approached, officials for Blackjewel contacted the county in hopes that a payment plan could be crafted to pay off the taxes in monthly payments over a period of years, said Carol Seeger, deputy county attorney.

Though that request was not granted, Seeger disputed that the county had denied Blackjewel’s request.

“They asked,” she said. “I have not sent them any communication saying I will not do that.”

As to whether it was possible for the county to acquiesce to Blackjewel’s request for a payment plan in the future, Seeger replied she could not answer that question as it was “speculative.”

Blackjewel CEO Jeff Hoops, an Appalachian coal miner that bought the Wyoming mines in late 2017, declined to comment when reached by phone Friday.

Blackjewel has run into a number of challenges since it stepped into Wyoming. The mines’ leases were initially held up because Hoops’ operations in states like Kentucky and West Virginia had serious violations on record.

Hoops said at the time that the violations were due to a clerical oversight that he remedied. He also noted that his Appalachian operations — underground mines — are under more scrutiny than Wyoming mines. Where Hoop’s Wyoming company had just two mine permits to oversee, his companies have an additional 720 in West Virginia, Kentucky and Virginia, Hoops wrote in a January email to the Star-Tribune.

“We also have at least one inspector on site everyday here versus a couple of days per quarter in Wyoming,” he said. “No comparison in the level of scrutiny.”

Hoop’s compliance record back east has drawn the attention of local landowners in Wyoming as well.

The Powder River Basin Resource Council has contested the transfer of the permits of Eagle Butte and Belle Ayr mines from Contura Energy to Blackjewel, citing issues with a ranch property Blackejewel has proffered as collateral against reclamation. The group has also raised concerns with state land regulators about Hoops’ environmental record.

“This is just more evidence of a company that maybe shouldn’t operate here in the state,” Shannon Anderson, lawyer for the Powder River Basin Resource Council, said of Blackjewel’s delinquency. “It’s just really troubling.”

The delinquent taxes strike another chord with the group, which is currently lobbying for a bill that would place counties at a higher priority when seeking back taxes from industry.

The group had hoped for a bill considered by lawmakers during the interim that would make local production taxes due monthly. But lawmakers demurred during a meeting in November given the pressure on the coal industry in Wyoming.

Sen. Jeff Wasserburger, R-Gillette, noted that some large coal operators had told him that their firms couldn’t afford to pay monthly taxes.

Campbell County has been through a few tax delinquency fights over Eagle Butte and Belle Ayr in recent years. The biggest concerned the two mines when they were owned by Alpha Natural Resources. Alpha filed for bankruptcy in 2015. As part of restructuring, Contura Energy was formed to acquire the two Alpha mines. In the intervening period, $20 million in local taxes were unpaid, according to the county.

The county fought for those taxes and settled at a loss last year after spending $1 million in legal fees.

Despite pressure on low-heat coal produced at Blackjewel’s two mines, the company has increased production at the Belle Ayr mine, south of Gillette, by 2.6 million short tons since taking over last year. Production at Eagle Butte, north of Gillette, fell in 2018 by 208,000 short tons.

The second half of Blackjewel’s 2018 taxes is due March 1, but is not considered delinquent unless left unpaid until May.

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Energy Reporter

Heather Richards writes about energy and the environment. A native of the Blue Ridge Mountains in Virginia, she moved to Wyoming in 2015 to cover natural resources and government in Buffalo. Heather joined the Star Tribune later that year.

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