Day in Gillette

Rory Wallett, founder of the Facebook group Blackjewel Employees Stand Together, relaxes in his yard with his daughters Ashlynn, 11, and Rachel, 14, in Gillette. The results of an auction of the company's mines were not available by press time Thursday.

The auction of mines owned by bankrupt coal operator Blackjewel continued well into the evening Thursday, with no results announced before press time. The sale comes exactly one month after Blackjewel shuttered its two Wyoming mines, sending hundreds of workers home and roiling communities in the Powder River Basin.

Blackjewel attorneys filed notice of the auction Wednesday, a sign that other companies likely submitted additional bids on some or all of Blackjewel’s assets. Any offers selected at the auction will need a federal bankruptcy judge’s approval at a sales hearing scheduled for Aug. 5.

A spokesman for Blackjewel declined to comment on the auction.

The former owner of the company’s Wyoming mines, Contura Energy, offered to purchase three of Blackjewel’s mines for $20.6 million last week, agreeing to immediately dish out $8.1 million for continued maintenance of the mines during legal proceedings.

According to the court documents, Contura would make an additional cash payment of $12.5 million to Blackjewel and retain responsibility of the nearly $250 million in reclamation, or cleanup, liabilities for its Belle Ayr and Eagle Butte mines in Wyoming.

The coal company would also assume ownership of Pax Surface Mine in West Virginia under the proposed deal.

The potential ownership transfer of the mines to Contura could result in the return of about 500 Wyoming workers to the mines in the coming weeks, according to Blackjewel attorneys.

As a condition of the new agreement, Contura will not assume responsibility for Blackjewel’s retirement plan for its employees, effectively terminating the plan.

The judge approved the launch of the sale process during a hearing on July 26 and set Wednesday as the deadline to submit additional third-party bids. Contura assumed the role of stalking horse bidder, setting the “floor,” or base price, the mines could be sold for.

Blackjewel attorneys submitted multiple requests for short-term debtor-in-possession funding to conduct minimal maintenance at the mines as they searched for long-term funding last month.

But efforts to secure the millions of dollars needed to resurrect the facilities to full capacity fell short multiple times, leading to the company’s decision to search for potential buyers.

A federal judge approved $5 million in short-term funding for Blackjewel during an emergency hearing held on July 3 and an additional $2.9 million in funding on July 19. But the loans only provided enough relief to the company to maintain the mines, pay insurance and settle past-due wages with current employees.

About 140 employees have been brought back nationwide for minimal maintenance and shipment of coal produced before the closures. The mines are not producing new coal at this time. The closures have wreaked widespread instability in the region as the coal mines’ customers, vendors and workers in the Powder River Basin awaited answers.

Contura has assumed the role of stalking horse purchaser before, when it submitted a bid to acquire the same two Wyoming mines in 2015 from then-bankrupt coal company Alpha Natural Resources. It owned and operated the mines for about two years before transferring them to Blackjewel but maintained the mines’ permits.

Contura’s bid did not include Blackjewel’s other 29 mines throughout West Virginia, Virginia and Kentucky, leaving hundreds of workers largely in the dark.

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