Published: January 24, 2019 |

Westmoreland Coal Company is seeking permission to sell its Kemmerer mine by the end of February, according to a filing Friday in the Houston Bankruptcy court.

Westmoreland filed for bankruptcy in October with $1.1 billion in debt, citing debt and the increasingly difficult market for thermal coal in the United States. It has come under fire from current and former miners in Wyoming during the bankruptcy proceedings for attempting to cut retiree benefits and end its contract with union miners at the Lincoln County mine. The Wyoming miners are represented by the United Mine Workers of America.

The company justified its requests to erase those liabilities in a recent filing in court, arguing that parties interested in buying the Kemmerer mine made it clear that they would not buy with the union contract in place.

The request on Friday, for approval of a sale schedule, is the first to explain the proposed process for the sale of Westmoreland Wyoming assets. The company said it has been negotiating with potential buyers and that it will designate a stalking horse bidder by Feb. 7. In laying out a schedule for a bidding process, the company hopes to pressure potential buyers to make more competitive bids, the company’s lawyers explained in the court documents. If the company receives more than two bids, including the stalking horse, for the Kemmerer mine, it will hold an auction Feb. 19. The sale hearing will take place Feb. 28.

A call to the company’s Denver headquarters was not returned. A call to a Westmoreland lawyer was not returned.

The Kemmerer mine employed 296 miners in Lincoln County as of September. The mine provides coal for PacifiCorp’s nearby Naughton Power plant. PacifiCorp protested Westmoreland’s’ original bankruptcy plan, arguing that the ambiguities over ownership and operation of the mine risked utility customers that rely on the power from Naughton. Kemmerer also provides fuel for local industries like trona.

The mine is a significant driver for both employment and local tax income in Lincoln County and the town of roughly 2,700 people.

“Of course our major concern is employment and what is going to happen with employees,” Lincoln County Commissioner Robert King said. “My goodness, we have a lot of folks that live in Kemmerer and work for the mine.”

In regular meetings with Westmoreland, local government has been assured that operations will continue as usual despite the bankruptcy. The county has hired a bankruptcy attorney to represent their interests in the Texas court, he said.

“We have been told that it’s going to continue the way it is,” King said. “Everything that we’ve see thus far indicates that that is true. The mine makes money. As long as it makes money they’ll continue to work it.”

Westmoreland purchased the Kemmerer mine from Chevron Mining Inc. in 2011. It bought the idled Haystack mine outside Evanston in 2016 from Kiewit. When asked by the Star-Tribune at the time why Westmoreland had picked up additional assets given the state of the coal industry,  then CFO Gary Kohn declined to comment in detail.

“We bought it and obviously had an intended purpose in buying it,” he said.

Kohn resigned as CFO in December citing personal reasons. The former CFO had received $1.2 million in incentive bonuses in addition to his $472,000 salary in the year leading up to bankruptcy.

Since filing for bankruptcy Westmoreland has sought permission to give 243 managers incentive bonuses, averaging $6,000 per upper-level manager at a total of about $1.5 million per quarter though the period of bankruptcy.

Those bonuses were part of the concerns raised by retired miners in letters sent to the bankruptcy court in Houston. The former workers of Kemmerer requested that the court protect pensions and medical benefits that Westmoreland intends to strip via bankruptcy, if the court will allow.

The Kemmerer mine has been unionized for more than 100 years.

Source: Casper Star-Tribune

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