State regulators granted the buyer of the Kemmerer coal mine a license to mine on Monday, just days after Westmoreland asked a judge to stay the sale of the mine to a Virginia businessman until the responsibility for cleanup had been transferred to the Virginian.
A license to mine grants the authority to operate the mine in Western Wyoming, but the mine’s hefty reclamation liabilities remain the responsibility of bankrupt Westmoreland Resources Partners until the state has approved a new responsible party.
Westmoreland filed for bankruptcy in October. Its Kemmerer mine primarily provides coal to a nearby coal-fired power plant in Lincoln County, PacifiCorp’s Naughton plant. The mine employs just fewer than 300 miners, most covered by the United Mine Workers of America union.
Though still working its way through bankruptcy, Westmoreland secured a buyer for the Kemmerer operation in the form of Tom Clarke, who had also entered, and then retreated, from a bidding war over Westmoreland’s assets in others states.
Clarke’s LLC, Sabine Pass Coal Group, applied for a license to mine, which was granted by the Department of Environmental Quality Monday, according to Keith Guille, spokesman for the department.
There are two stages of a mine passing from one owner to another in Wyoming. First the new miner must obtain a license to mine, for which associated executives like Clarke have to be clear of serious environmental violations on a federal tracking system. The license precedes a permit transfer, where the buyer has to demonstrate that it has the means to clean up post mining via insurance or collateral.
Guille, of the DEQ, said that once the department had received proposed bonds for the Kemmerer operation, and approved them, it would open up the transfer of permit to public comment.
Wyoming Public Radio reported comments from the Sierra Club Monday questioning Clarke’s ability to cover reclamation obligations based on the delay in posting those bonds, as reported in recent court filings.
The Westmoreland bankruptcy has been controversial in the small community of Kemmerer, with unionized miners criticizing executive bonuses granted in the lead up to bankruptcy and the insistence by Westmoreland to trim long-held employee benefits like health care for retirees.
But, the uncertainty over the future of the mine’s operations was somewhat waylaid by the arrival of Clarke.
Clarke, a businessman with roots in the health care industry, got into the coal business in 2015 by picking up bankrupt Patriot Coal’s assets in Appalachia. Clark has said in previous interviews with the Star-Tribune that he believes the Kemmerer mine has a viable future selling coal by broadening its customer base to other industrial consumers in the region.
With the license in hand, Sabine Pass Coal Group is the second coal firm in recent years to hold the license to operate mines in Wyoming, though another firm is still responsible for the cleanup.
Contura Energy — a spinoff of the Alpha Natural Resources bankruptcy — sold the Eagle Butte and Belle Ayr mines of Campbell County to an Appalachian miner’s newly formed Blackjewel LLC in 2017. The firm was delayed in obtaining licenses to mine due to the environmental record of CEO Jeff Hoops.
More than a year later, Contura — which has reemerged with Alpha — is still the responsible party for cleanup at the Wyoming mines. Blackjewel has proposed bonding, but the permit transfer is currently held up by a protest from a landowners group in northern Wyoming that has questioned two land parcels that Contura currently uses, and Blackjewel would like to use, as collateral.
In an emergency motion filed Thursday, Westmoreland’s former creditors asked the bankruptcy judge to enforce the Kemmerer deal that had been approved by the court, which the lenders argue includes safeties so that the sale doesn’t take place until reclamation obligations currently held by Westmoreland are replaced by Clarke’s firms.
Much of the Westmoreland bankruptcy is over, after a new entity formed by Westmoreland Coal Company’s former creditors bought the firm’s core assets in mid-March and emerged from Chapter 11.
Westmoreland Resource Partners, which owns the Kemmerer mine, is still in bankruptcy.