
A coal train idles in front of the Decker Coal Mine near the Wyoming border in Decker, Mont. At the end of January, mining ceased at the Decker coal mine after the owner of the mine filed for bankruptcy late last year.
A Powder River Basin coal mine has closed down for the first time in modern history. At the end of January, mining ceased at the Decker coal mine in Montana after the owner of the mine filed for bankruptcy late last year.
Home to some of the world’s largest mines, the Powder River Basin is the epicenter for coal production in the country. But a dramatic decline in thermal coal demand has left many companies in trouble.
Coal firm Lighthouse Resources owns the Decker mine in Montana’s Big Horn County, just north of Wyoming’s border. A majority of the mine’s workers live in Wyoming. The parent company filed for Chapter 11 bankruptcy in December, citing dismal market conditions for coal. Continuing to operate the surface coal mine was no longer economically feasible, it stated in court filings.
But before the doors of the Decker coal mine officially shutter for good, the company needs to send out the last shipments of coal, clean up the mining site and settle outstanding obligations to its workers. A battle over the details is now playing out in federal bankruptcy court.
Bid to shed worker benefits
Upon filing for bankruptcy on Dec. 3, the company laid off 76 workers at the Decker mine. That left 28 active union employees and nine furloughed union employees. An additional 18 non-union employees held manager or administrative positions.
But by Jan. 22, the company had stopped mining for coal and kept on only four union workers at the facility, according to court documents.
Over the last two months, the company claims it has been negotiating with the United Mine Workers of America over an amended contract agreement.
But as negotiations slogged on, Lighthouse Resources asked the U.S. Bankruptcy Court for the District of Delaware on Jan. 20 for approval to reject the collective bargaining agreement struck with the union in 2012.
That would allow the coal company to shed its remaining pension and medical obligations promised to union employees.
The company maintains that eliminating these remaining worker liabilities is the only way to save enough money to complete reclamation, or cleanup, at the mine site.
The union, in turn, has threatened to strike.
The United Mine Workers of America requested that the court block the coal company’s request to exit its union contract. Union representatives outlined how negotiations with the coal firm over a new agreement had been “hollow” and not carried out in “good faith.”
“Given the current Proposal, the (United Mine Workers of America) Employees may be left with no choice but to exercise their right to strike,” the union said in a Jan. 27 court filings.
“The modification of the (collective bargaining agreement) will create a substantial hardship for the (union) employees and their families who have labored for years at these facilities,” the union added.
Support local news coverage and the people who report it by subscribing to the Casper Star-Tribune.
As of Friday, the union and attorneys for Lighthouse Resources are still in negotiations over the contract, according to Michael Dalpiaz, vice president of District No. 22 for United Mine Workers of America.
Lighthouse Resources declined to comment for this story. But in court documents, attorneys for the company defended its attempts to work with the union on finding a new deal.
“Debtors (Lighthouse Resources) have and continue to negotiate with (the union),” the company told the court in a Jan. 29 filing. “The Debtors’ proposal is not merely a ‘take-it or leave-it’ rejection of the 2012 CBA (collective bargaining agreement) or a ‘wish list’ of changes. The proposed modifications of the CBA are needed to ensure the viability of the proposed Reclamation Trust.”
In other words, the company needs to divert funds originally dedicated to workers’ benefits to the mine cleanup fund instead.
“It’s just unfortunate that you’re pitting workers against reclamation,” said Shannon Anderson, staff attorney for the Powder River Basin Resource Council. “The company should be able to do both and fund both. They made commitments to do both.”
Meanwhile, exactly how or when the 12,000-acre surface mine will be cleaned up in Montana remains an open question. It’s unclear if the company will hire back former workers to complete reclamation.
The United Mine Workers of America are willing to put up a fight to protect workers, Dalpiaz asserted. He’s intent on keeping the collective bargaining agreement intact when the reclamation ramps up. He anticipates about 30 former workers will be hired back to complete remediation.
“Workers are not going to get screwed like they did in Gillette or Kentucky and every place else when companies file bankruptcies without a union,” he said.
Lighthouse Resources’ proposed bankruptcy plan would establish a reclamation trust to complete remediation at the mine.
When the coal firm filed for bankruptcy, it started looking for a new buyer of its coal export terminal project on the West Coast. But no buyer materialized. The lack of revenue from this venture and others could mean less money for creditors, reclamation and workers at the end of the day.
Montana Department of Environmental Quality confirmed coal mining was no longer taking place at the Decker facility, though some remaining coal would be shipped out in the near future.
“Once the bankruptcy is finalized and funds are released, reclamation activities will begin,” Moria Davin, a public relations specialist with the Montana agency, said in an email to the Star-Tribune. “The mine has reclamation plans and adequate bonding.”
Montana holds $126.4 million in bonds for the Decker mine.
Davin said the agency would also continue to complete inspection of the mine on a monthly basis.
Lighthouse Resources filed for Chapter 11 bankruptcy at the end of last year with over $256 million in secured debt. According to court filings, Lighthouse Resources owes Big Horn County in Montana over $6.9 million, the Montana Department of Revenue more than $4.4 million and the U.S. Department of Natural Resources Revenue about $3.3 million, in addition to hundreds of creditors.
There’s a history of coal companies breaking away from collective bargaining agreements after filing for bankruptcy in the region. When Westmoreland Coal Company, the owner of the Kemmerer mine in southwest Wyoming, filed for bankruptcy, it received court approval to toss out retiree obligations and the union contract in 2018.
What’s more, a majority of the Powder River Basin coal mines are not unionized, leaving workers with few protections when a company goes bankrupt.
Decker mine isn’t southern Montana’s first coal mine closure. Bull Mountain mine closed in 1998 before finding a new owner and reopening in 2004. It now operates as Signal Peak mine.
Lighthouse Resources will appear again in bankruptcy court for a hearing on Feb. 17.
Billings Gazette reporter Tom Lutey contributed to this story.
Photos: Westmoreland Coal’s bankruptcy leaves a southwest Wyoming community on the brink
Kemmerer

A water tower stands above Kemmerer on Feb. 11. Much of the city is built on a hillside that slopes down to the Hams Fork River.
Kemmerer

A pickup parked along Kemmerer's central square on Feb. 11. While Kemmerer and its sister community Diamondville are quiet, out-of-the-way towns, the coal mine and PacifiCorp's Naughton Power Plant provide a solid base of dependable, good-paying jobs.
Kemmerer

Larry Gunter stands for a portrait Feb. 12 at his home in Kemmerer. Gunter worked at the Kemmerer Mine from 1971 until his retirement in 2018, and spent most of his career on the blasting crew. His father, uncles, cousin and brother all worked for the mine and his sister is still on the job. Gunter expected his 46 years of labor would guarantee him a pension and health care for the rest of his life.
Kemmerer

Larry Hinton stands in the garage Feb. 12 at his home in Kemmerer. Hinton retired last year from the Kemmerer mine where he had worked since 1976, primarily as a field mechanic. Like other Westmoreland Coal retirees and their spouses, he and his wife are all but certain of losing their health benefits. Hinton planned to fill his retirement with hunting, fishing, scuba diving and travel, but said he may need to go back to work to afford health insurance.
Kemmerer

A painted wooden welcome sign stands along Fossil Butte Drive on Feb. 12 in Kemmerer.
Kemmerer

A boarded-up former storefront on Diamondville's main drag pictured the evening of Feb. 11. Like Kemmerer, the town popped up in the late 1890s to provide homes for coal miners.
Kemmerer

Westmoreland's Kemmerer Mine is pictured Feb. 12 in Lincoln County. Coal has been mined in the area since the 1800s. The current open-pit mine opened in 1950.
Kemmerer

Train cars sit on tracks running through Kemmerer on Feb. 12.
Kemmerer

Cullen Pace, a worker at the Kemmerer mine who lives with his family in Randolph, Utah, stands for a portrait Feb. 11 at Rosie's bar in Diamondville.
Kemmerer

Kemmerer coal miner Jay Buck stands for a portrait Feb. 11 at Rosie's bar in Diamondville.
Kemmerer

Kemmerer coal miner Terry Vetos stands for a portrait Monday, Feb. 11, 2019 at Rosie's bar in Diamondville.
Kemmerer

Retired Kemmerer coal miners Mark Bartlett, Joe Fagnant, Kim McKee and Dave Hunzie sit at Rosie's bar on Feb. 11 in Diamondville.
Kemmerer

Diamondville Avenue, the town's main drag, is pictured Feb. 11 in Diamondville.
Kemmerer

A pickup parked on Kemmerer's old town square on Monday, Feb. 11, 2019. The original J.C. Penney Company store is at left.
Kemmerer

Locomotives and rail cars sit on tracks running through Kemmerer on Tuesday, Feb. 12, 2019.
Kemmerer

PacifiCorp's Naughton Power Plant is served by Westmoreland Coal Company's Kemmerer mine. Governor Mark Gordon has expressed concern over Rocky Mountain Power's consideration of shuttering some coal-fired power plants in Wyoming over the next 4 years.
Kemmerer

Westmoreland's Kemmerer Mine pictured Tuesday, Feb. 12, 2019 in Lincoln County. Coal has been mined in the area since the 1800s. The current open-pit mine opened in 1950.
Kemmerer

Pine Street in Kemmerer pictured Monday, Feb. 11, 2019.
Kemmerer

The Victory Theater on Kemmerer's old town square pictured Monday, Feb. 11, 2019.
Kemmerer

Train cars sit on tracks running through Kemmerer on Tuesday, Feb. 12, 2019.
Kemmerer

Train cars sit on tracks running through Kemmerer on Tuesday, Feb. 12, 2019.
Kemmerer

The outskirts of Kemmerer, pictured Feb. 12.
Follow the latest on Wyoming’s energy industry and the environment at @camillereports