Westmoreland Secured Lenders To Take Over Kemmerer Mine
Westmoreland's Kemmerer coal mine will soon have new owners. The debtors behind the recently bankrupt company will take over and hire a new operator for the mine.
Virginia Businessman Tom Clarke was set to take over the mine, but couldn't close the deal because of challenges replacing the reclamation surety bonds. Clark was the only interested party in the search for a new owner.
Without any other takers, the group of lenders Westmoreland owes money to will be taking over pending a few last steps. They're paying for the mine by forgiving company debt. Peter Morgan, Sierra Club senior attorney, said the group had previous called the take-over a last resort.
"They seem to have exhausted all other options, so this is what they're left with which bodes poorly for the idea of Kemmerer being an attractive property that the market sees as being a viable coal mine," Morgan said.
In a court filing, the debtors explained it's in "discussions with various sureties to obtain replacement bonding in connection with the permanent transfer of operating permits from the WMLP Debtors to the Credit Bid Purchaser."
The group has already found a company to operate the mine, Canadian contractors North American Construction Group Ltd. It does not appear to operate any other coal mines.
"They need to bring in these outside operators because the secured lenders themselves are basically a coalition of hedge funds who have no experience or probable interest in operating a coal mine," Morgan said.
The new buyer will also need to solidify a collective bargaining agreement with Kemmerer mine employees union representatives, the United Mine Workers of America.
A union representative said negotiations were close to finished with Clarke before that fell apart. Now, he said discussions are going well with the group of lenders. Employees at the Kemmerer mine likely won't see a change from the new operators save for a new boss on the ground.