By Beth Burger
February 4, 2019 - A veteran coal executive has been named the successful bidder for Ohio’s Buckingham and Oxford mines owned by Westmoreland Coal Company in a federal bankruptcy case.
Westmoreland, a Colorado-based company, has 13 active mines and holds 55 mining permits, nearly a third of the permits in Ohio. The sixth largest coal company in North America, Westmoreland filed for Chapter 11 bankruptcy in October.
A hearing to approve the sale is scheduled for Monday in a federal courtroom in Houston, Texas.
Chuck Ungurean is the former owner of Coshocton-based Oxford Coal Company. He sold the company to Westmoreland in 2015, and court records indicate he placed an initial bid to repurchase the Ohio mining sites by paying $1 million but would require Westmoreland to pay $16 million to $20 million in reclamation liabilities, according to court records. He could not be reached for comment.
He was later outbid by Thomas Clarke, a nursing home operator with a troubled financial past. He had asked for no reclamation funds from Westmoreland, according to court documents. Clarke chose not to submit a counterbid Friday.
In Ungurean’s latest bid, the purchase price for the Buckingham Mine is $1.8 million in cash plus the assumption of $800,000 of trade debt. For the Oxford mines, the purchase price is $3.5 million, according to a notice filed on Friday, and Ungurean will assume the reclamation liabilities.
Had Ungurean’s newly formed company not placed a higher bid, experts were concerned that Ohioans would foot the costs of a huge cleanup bill if Clarke’s business venture had failed and he abandoned the Ohio mines.
“We’re keenly interested in this. We want to make sure whoever comes out of this continues to be a viable member of the coal mining community in Ohio,” said Mike Cope, president of the Ohio Coal Association.
Westmoreland filed a notice on deadline naming a newly formed company by Ungurean, CCU Coal and Construction, as the successful bidder. State records show the company is based in Columbus and was formed in December.
On Friday, the Ohio attorney general’s office, representing the Ohio Department of Natural Resources and the Ohio Environmental Protection Agency, filed an objection with the court before Ungurean’s company was named as the successful bidder. The objection asked that Ohio be able to vet potential buyers.
The notice for the successful bid did not specify reclamation details. However, given Ungurean’s track record with Ohio mines he owned and managed for years, experts said reclamation was less of a concern.
“He built the company. It’s his company. ... If anyone knows how to operate a business profitably, he does,” Cope told The Dispatch on Saturday. “There was a very high debt load on Westmoreland. Oxford and Buckingham had to pay a share of that. ... They were paying for somebody else’s stuff.”
As of January, the state’s reclamation fund was at a little more than $22 million.
State records show Westmoreland’s liability to clean up the 13 mining sites is nearly $150 million. The company has paid the state $16 million in bonds for individual mining permits in case the mines are forfeited.
Westmoreland is pushing to expedite the bankruptcy process, according to court records.
The Buckingham Mine typically produces coal for American Electric Power, but the utility’s agreement to purchase coal mined there expires Dec. 31 and there is no other buyer lined up for the mine’s coal.
“The debtors believe the value of the Buckingham Mine to potential buyers will significantly decline throughout 2019,” Westmoreland argued in court records.
A recent U.S. Energy Information Administration report says coal production has fallen by more than one-third since 2008 and the electric power sector, the main consumer of coal, is expected to reduce its coal demand more with the planned closings of coal-fired power plants over climate concerns and pressure from competitive natural gas and renewable energy markets.