Former Blackjewel Coal Mine Faces Pushback Over Permit Renewal

Jan 21, 2021

Eagle Butte mine just after its 2019 bankrutpcy
Credit Cooper McKim

A landowners' group voiced objections to Eagle Specialty Materials, LLC's Eagle Butte mine application for a five-year permit renewal. The Powder River Basin Resource Council raised concerns in a requested informal conference regarding the company's reclamation ability, legal right to mine, and connection to violations.

"These all stack up to be fairly concerning issues that [the Wyoming Department of Environmental Quality] should address and we hope that you will address in order to try and avoid a more serious problem in the future," said Jill Morrison, executive director of the Powder River Basin Resource Council.

The DEQ held the informal conference in order to help its director Todd Parfitt make a decision regarding the five-year permit renewal application of Eagle Butte.

Eagle Specialty Materials obtained both the Eagle Butte and Belle Ayr mines in October, 2019 via Blackjewel, LLC's bankruptcy proceedings. ESM was formed in September, 2019. Its registered agent was Jeoffrey Pilon, according to its initial Wyoming Secretary of State filings. He also served as the Chief Operations Officer for Blackjewel, LLC. Pilon resigned from his appointment with ESM in March, 2020.

PRBRC staff attorney Shannon Anderson's first objection related to ESM's right to mine coal without a federal coal lease. Typically, an operator would not be able to obtain a permit without a federal coal lease. In order to get it, Anderson explained ESM would be required to pay off Blackjewel's debt with a federal agency.

"Imagine if this was private coal or state coal. You'd really want to make sure they have the right to mine that coal. And right now, we just don't believe they do because they don't have the federal coal leases," she said. "It's very clear in these bankruptcy documents."

Jim Seward, an attorney representing Eagle Specialty Materials, LLC, said ESM is currently negotiating with the U.S. Department of Justice and the U.S. Department of the Interior and hopes to get those final documents approved.

But until then, "the bankruptcy court has made it clear they're the ones with the authority to ensure that these assets, under their control, continue to be mined," Seward said.

The second objection from the PRBRC related to outstanding violations on permits held by ESM in Appalachia. Anderson said permits should not have been issued given the significant outstanding violations connected to the eastern mines it took on. That would have been found via an Applicant Violator System (AVS) check.

Kyle Wendtland, administrator for DEQ's land quality division, said it's not required to do an Applicant Violator System check during the renewal process. He added they still did do a check, but only within the scope of the Eagle Butte and Belle Ayr mines which did not come up with any violations.

Seward said there's no common ownership or control between ESM's eastern and western mines, therefore violations there would not apply.

Lastly, the PRBRC raised concerns of ESM's ability to reclaim its land given reduced coal production and revenue at the mine. Anderson requested the DEQ ask for updated information from Eagle Butte's operator to ensure they still have the ability to reclaim the land.

DEQ Director Todd Parfitt said he will review the information provided and render a decision to approve or deny the five-year permit for the Eagle Butte mine within 60 days.