Mine Closure

A man reacts after a Blackjewel employee said he wasn't able to deposit the cashiers check he received from the company during a public meeting Tuesday afternoon at the Campbell County Courthouse in Gillette.

Blackjewel has some explaining to do.

The coal company on Monday filed for bankruptcy. Within hours, it suddenly closed its Wyoming mines – Belle Ayr and Eagle Butte – after it failed to obtain $20 million in financing.

The last four years have seen many dramatic and distressing moments for Wyoming’s coal industry. But what happened Monday was shocking: The complete shutdown of two of the nation’s largest coal mines.

In an instant, hundreds of coal miners lost their source of income. And Campbell County, after regaining its footing following the 2015 energy downturn and 2016 mine layoffs, found itself reeling from a surprise blow.

Since then, there’s been a flurry of news related to the bankruptcy. Blackjewel lawyers said repeatedly that without an immediate financing deal, the company would have to move from Chapter 11 bankruptcy, which involves reorganizing the company, to Chapter 7, when a business’ assets are liquidated.

The latter is a nightmare scenario for Wyoming, touching off an economic shockwave that would be felt around the entire state.

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A judge rejected a deal for $20 million in financing during a hearing that stretched into the early hours of Wednesday morning. Then hours later, the judge agreed to $5 million in financing. That amount won’t allow the mines to reopen. Rather, it will pay for some basic maintenance and security to prevent fires, floods and security breaches. As a condition of the loan, Blackjewel CEO Jeff Hoops was required to resign.

Hoops may no longer be at the helm of Blackjewel. But he and other executives owe Wyoming an explanation for what happened here. (Hoops sent an email to employees saying his family trust loaned money to the company to try and keep it going. He also denied taking any money out of the company.) Blackjewel is not the first coal producer in Wyoming to declare bankruptcy. In fact, the company is the sixth in the recent past. But while all of those episodes have been painful, none left mines shut down or attorneys threatening total liquidation.

The first question that should be answered is this: How did Blackjewel get to the point where the only option, according to company lawyers, was a major loan or liquidation? How did it get to the point where the mines had to be closed, something other companies were able to avoid as they made their way through the bankruptcy process?

We’ve also heard disturbing statements from employees about paychecks that they couldn’t cash or 401(k) contributions that didn’t arrive. Blackjewel owes these workers a full account of what happened, and to make things right if any employees didn’t receive what they should have.

While the company’s actions have been concerning, the state of Wyoming’s response has been laudable. Gov. Mark Gordon quickly flew to Gillette to meet with the community there. The Department of Workforce Services sent extra resources to the region. Our congressional delegation stepped in to offer assistance, and Sen. Mike Enzi even flew to Gillette on hearing the news.

It will take time before everything is sorted out. It remains to be seen whether the mines will reopen or whether the company will avoid liquidation. In the meantime, it’s incumbent on all of us to support a Wyoming community that’s been badly shaken this week while demanding answers from the people whose actions led to this unfortunate situation.

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