Coal Woes Leads To Bankruptcy, Mine Closure
Utah-based Lighthouse Resources has filed for Chapter 11 bankruptcy and will work on a reclamation plan for the Decker Mine in Montana. The company, with Wyoming employees, will lay-off more than half of its employees throughout its operations.
"The Debtors believe this chapter 11 plan process is in the best interests of the Debtors' creditors and parties in interest," reads the company's initial explanation of bankruptcy filing.
Lighthouse expects that Decker will lose its last customer in early 2021, after which it will cease all mining and shift toward reclamation. That's unique to the Powder River Basin. In the past several years, coal bankruptcies have often resulted in mine sales as with Cloud Peak Energy and Blackjewel. Lighthouse, however, was unable to find a buyer for its mine. The state of Montana will have to approve a reclamation plan for the mine.
The company pointed to a variety of industry-wide concerns as cause for their filing including: depressed price of thermal coal in the US, COVID-19 impacts on pricing in Asia, and cost to produce coal outweighing sale price. The company also referenced the lack of port capacity on the West coast as a contributing factor.
Lighthouse had already made workforce reductions. In September, the company furloughed more than 70 employees
The company has a financial plan to move through its restructuring, though funds are set to run out in March of 2021. The "Debtors" hope to swiftly move through the Chapter 11 case.