GILLETTE – Two of the 10 largest coal mines in the country shut down Monday and locked out employees after Chapter 11 bankruptcy proceedings fell apart for parent company Blackjewel LLC, pushing the company closer to liquidation.
The mines that shut down, Eagle Butte and Belle Ayr, are the fourth- and sixth-largest coal mines in the U.S., according to the federal Energy Information Administration. In 2017, the most recent data available, the mines extracted a combined total of more than 33 million short tons of Powder River Basin coal. That’s enough to power the entire state of Wyoming, plus roughly 100,000 additional households.
“We’re all hopeful things can be brighter in a couple days,” Gov. Mark Gordon said Tuesday. “But to let you all know, hope isn’t a plan for this administration.”
In a statement to ABC News, CEO Jeff Hoops voiced confidence that the mines would rise from the dust of restructuring, though doubts about the restructuring surfaced when the company missed out on a $20 million bankruptcy loan.
The sister mines in Campbell County both locked their gates Monday, asking workers not to report for duty.
Campbell County Sheriff Scott Matheny said during a public hearing Tuesday that the mines will continue to be guarded by his staff, at least until the coal dust settles and safety checks ensure no accidents could befall displaced workers returning to the mine. Guarding the mines, he also hinted, should ensure no looting by disgruntled miners occurs.
“Right now, security is the most important thing,” Matheny said, pointing out that meetings with mine managers have been ongoing. “We’re not letting anybody in until we hear from someone else. I know that’s not what you wanted to hear, but that’s the position we took.”
Matheny was among the public officials to address a crowd in Gillette on Tuesday that seemed incensed at the sudden closure of the mines that blindsided many and flooded the Gillette office of the Wyoming Department of Workforce Services with more than 160 displaced miners.
A text message went out to many employees Monday, stating that the closure had occurred after the bank’s denial of a bankruptcy loan to make it through restructuring.
“For those of you who haven’t heard, the Chapter 11 bankruptcy proposition didn’t get approved today,” the text from unidentified management to unspecified employees said, according to Basin Radio. “I don’t know what this means altogether, but for now, we are ceasing operations and sending everyone home.”
Workers have railed against the “insensitivity” of the bank that put out 600 employees and an estimated 300 support workers who could also soon be filing for unemployment. Other workers were quick to blame Blackjewel for the closures and surrounding turmoil.
One miner in the audience accused Jeff Hoops, the CEO of Blackjewel, of “embezzlement” for supposedly diverting or retaining money destined for 401(k) plans and health savings accounts.
Talking to Gov. Mark Gordon, who conducted the proceedings, the man said, “If you did that, you’d be in jail; Jeff Hoops needs to be accountable on this. When he doesn’t put that money into our account, he’s a criminal.”
Nodding, Gordon responded, “The point’s well taken. That’s something we’ll take into consideration.”
While many were blindsided by the sudden closure, others weren’t so surprised.
“We have been raising questions with Wyoming regulators about the company’s financial stability and operatorship, because this is exactly what we feared would happen,” Joyce Evans, chairwoman of the Powder River Basin Resource Council, said in a prepared statement. “The entire history of the company’s involvement in Wyoming has had red flags, starting with the fact they were essentially gifted the Belle Ayr and Eagle Butte mines by Contura to rid themselves of the liability.”
She added that more flags went up when the mine failed to pay taxes to Campbell County and argued that Wyoming should have never allowed the mines to operate under Blackjewel in the first place.
News reports Monday indicated that Blackjewel accumulated $37 million in tax debt to Campbell County and another nearly $12 million to the Wyoming Department of Revenue. Taxes paid by coal companies in Wyoming are often used to beef up education, which is famously well-funded in Wyoming.
But the Powder River Resource Basin Council has often been critical of coal mining in the state. Only two months ago, when coal giant Cloud Peak filed for bankruptcy, Evans said she urged the state to work on behalf of the miners, taxpayers and the environment.
“We are deeply concerned about Blackjewel’s employees and their benefits, as well as the millions of dollars of delinquent ad valorem taxes,” Evans stated. “Bankruptcy should never be used as a haven for a mining corporation to escape its reclamation bonding and tax obligations.”
According to Todd Parfitt, director of the Wyoming Department of Environmental Quality, both sites are fully bonded, leaving nothing to worry about along the lines Evans hinted at in her statement.
“The first thing we did is we looked at the bond for Belle Ayr and Eagle Butte,” he said, pointing out that the state has funds paid by the company to reclaim the site in case of forfeiture.
Bonding is a typical measure used to prevent lasting environmental damage if a mine operator fails. The bonds paid by a company are later used to reclaim the land to a pristine state after the company goes under.
However, Parfitt said, that drastic measure is yet in the future. “We’re not there yet,” he said. “We need to see what the bankruptcy court says.”
In the interim, safety measures at the mine are of the highest priority, according to Kyle Wendtland, land quality administrator at the Wyoming Department of Environmental Quality.
“We have our folks on the ground to verify what those conditions are,” he said. “Could there be any coal fires because of the wet spring? Conditions are certainly ripe for that. But without physical onsite (information), it’s difficult to set priorities.”
The department is working to secure on-the-ground status as soon as possible.
For the 600-plus workers without a job, the Wyoming Department of Workforce Services is rushing to fill the void, according to department Director Robin Sessions Cooley. The department has formed rapid response teams to help the workers take advantage of state resources as varied as unemployment claims or brushing up on soft skills for landing their next jobs. An informational meeting was set for 2 p.m. today Wednesday, July 3 for the workers who lost their jobs.
The department also plans to hold a job fair at Gillette College next Monday, July 8, beginning at 9 a.m., to try to directly place as many of the workers as possible. Cooley reminded employers that training grants are available through the state.
“The first person we saw was at 3:30 [the day] that the mines closed – right after they made the announcement,” said Rick Mansheim, center manager for the Department of Workforce Services' Gillette office. “I was getting ready to call Cheyenne when they called me.”
The department has already gone through all the “rapid response” materials it had on hand to help layoff victims through such an event. The Gillette center continues to try to keep things orderly during the fallout from such a massive layoff in a small town.
“We’re averaging 70 people at a time in our office and moving them through as quickly as we can,” Mansheim said.
In a town where hotels and restaurants often tout pro-coal messages at check-in desks, Wyoming’s governor also expressed his support.
“Ladies and gentlemen of Campbell County, you power the nation,” he said. “We stand behind and beside you.”