Three months since Blackjewel LLC filed for bankruptcy, a new company is set to close a deal this week and take over the Eagle Butte and Belle Ayr mines. At a Campbell County Commission meeting, Carol Seeger, the county administrative director, said Eagle Specialty Materials LLC is expected to close on its sale order this Friday, October 4.
Eagle Specialty Materials (ESM) is an affiliate of FM Coal. It was formed specifically for a transaction with Contura Energy, which acted as the stalking horse bidder for Blackjewel's two mines though without long-term mine plans.
In order to close on the deal, Eagle Specialty Materials, along with Contura Energy, negotiated with Campbell County on a payment plan for back-pay of furloughed employees and back-taxes. The meeting allowed Campbell County commissioners to vote on the payment plan.
The deal has ESM paying half of the owed $17.5 million in unpaid 2019 taxes over five years. Blackjewel had previously been making payments that ended up paying all taxes for 2018 except for coal production taxes- those were listed under Contura's name. Contura agreed to pay only $13.5 million of $15.1 million owed.
"We've kind of got this agreement to the best-case scenario for the county," said Seeger. "I don't know if we're going to get more than what's in front of you in regard to the parties."
Seeger added the sale order would make employees whole again with $1.8 million to cover worker back-pay in addition to missed 401 (k) and Health Savings Account payments.
Commissioners made it clear getting that back-pay taken care of was priority number one.
Del Shelstad said, "I would have a hard time giving them a concession on taxes without them giving a concession back to employees who've worked hard for their money and have not been paid."
Rusty Bell, chairman of the county commission, added it's part of a greater commitment he expects from Eagle Specialty Materials to the community. In conversations with their representative, Mr. Costello, Bell said he's looking for a company that wants to be in Campbell County and wants to be a part of the community.
"Certainly, Contura was not that company. Certainly, Blackjewel was not that company. Mr. Costello was very positive in that. They do have a long-term mining plan. And they do want to be here and they do think they can compete in the market," Bell said.
Bell and three other commissioners agreed this was the best option. But Mark Christensen said he planned to vote no.
"[Contura] has done everything they can to take advantage of us," he said, mentioning the company would not pay the full $15.1 million owed in coal production taxes. "Contura is making record profits then screwing us for $1.5 million."
Christensen said he understands that time is of the essence. Due to the current payment plan, Bell said every week that a deal doesn't close the county loses 50 percent on taxes owed.
But Christensen pushed back saying this hasn't been an orderly process. It's three months in and they're just now looking at a payment plan. He offered a special meeting.
"I don't like letting Contura off the hook. If they want to only pay $13.6 [$13.5], then understand we'll go to West Virginia and collect our remaining $1.5 [million]."
Christensen voted nay while the four other commissioners voted aye, pushing the payment plan forward.
On the bright side, Commissioner DG Reardon said: "It does get Contura and Blackjewel completely out of Campbell County which I don't think can happen fast enough. Hopefully, we've got a decent operator here with Eagle Specialty Materials."
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