The recent shift in ownership of the troubled Kemmerer coal mine has union representatives there confident in the preservation of the more than 200 positions put in jeopardy when the mine’s previous owner declared bankruptcy earlier this year.
However, some see the details of the transaction — the exchange of the mine to the company’s secured lenders in exchange for debt forgiveness — and the new owners — a company specializing in mine reclamation operations — as signs the mine’s days are numbered.
Last week, the mine’s owners, Westmoreland Resource Partners, announced that the Kemmerer mine would be sold to its secured lenders.
At face value, this was a victory, following the collapse of a sale to Virginia businessman Tom Clarke in April. However, rather than selecting a traditional mining operator to run the mine, the lenders went on to announce the hire of a Canadian company, North American Construction Group LLC, to run the mine. According to the company’s website, the company specializes not in management but in operations like mine site development and mine reclamation, the final step of a surface mine’s useful life.
These details are noteworthy for several reasons, said Peter Morgan, an attorney with the Sierra Club’s environmental law program. Primarily among them? The selection of a non-operator, after a number of failed sales to established operators over the past several years, leads Morgan to believe the mine’s lenders are focusing not on profits but on mitigating further losses.
“The issue we’ve seen with Kemmerer is there have been ample opportunities for another coal operator to come in and pick up this mine,” Morgan said. “That’s what we’d have expected to see if the market had perceived this mine to have any forward-going value. But what we’re now seeing is a buyer of last resort — the group of secured creditors — taking the mine. I think it’s been clear through the bankruptcy that wasn’t their first choice.”
Coal is facing a shaky future, with dramatic reversals in the valuations of thermal coal mines, or suppliers to coal-fired power plants, in the U.S. in general and specifically thermal coal mines in the Powder River Basin. Meanwhile, communities like Kemmerer have already begun looking forward to a future where two coal-fired power plants in the region shut down, taking with them the remaining market that exists for locally produced coal.
However, United Mine Workers of America District 22 Vice President Mike Dalpiaz said that early talks with the mine’s new owners have so far been positive, and he is confident that a culture change there could mean a more optimistic future for the mine than was previously possible.
“(North American Construction Group) is going to look for other places to sell the coal, too — something Westmoreland didn’t do — so hopefully they can sell more product,” said Dalpiaz. “There are hundreds of millions of tons of recoverable coal there, so the coal is not an object. It’s just finding somebody to buy the product. As long as the power plants continue to go, the mines should continue to be there.”
Dalpiaz said so far, collective bargaining with the new ownership of the mine is progressing in a positive direction and, while unclear on how many workers will be retained, he said he expected local miners to be back to work in due time.
“I’m available every day to get this deal done, so we can get this nightmare behind us and, hopefully, continue to mine coal like they know how to do it in Kemmerer,” he said, “with a new management team, new thoughts and ideas, and the same workforce.”