By Nick Reynolds

June 10, 2019 - A federal judge in Houston has ruled that the sale of a troubled coal mine in Kemmerer can move forward, several months after a previous sale to a Virginia millionaire fell apart.

In an order filed last week in the Southern District of Texas, Judge David R. Jones granted the sale of Kemmerer mine to a group of secured lenders, a significant development for the mine and a community that has grappled with its future since the mine’s owners – Westmoreland Coal – declared bankruptcy in October.

The news comes after a number of entities — including the U.S. Department of the Interior — filed objections in federal court nearly two weeks ago over a number of complications stemming from the company’s bankruptcy declaration earlier this year.

The same court approved the mine’s sale to Virginia venture capitalist Tom Clarke in March. However, that sale fell through after a dispute with the creditors of the mine’s ownership, Clarke told the Star-Tribune last month.

Photos: Westmoreland Coal's bankruptcy leaves a southwest Wyoming community on the brink

The sale has not yet been finalized. However, there is little doubt its purchase is imminent: the sale will be funded by the debt owed to the mine’s creditors, a potential effort to minimize the group’s losses after little interest from outside investors.

According to the Wall Street Journal, Keith Alessi, chief executive officer of the lender-owned company acquiring Kemmerer, said during last Wednesday’s hearing he believed the business would be successful and have sufficient liquidity to operate after the purchase. 

The sale also depends on a new collective bargaining agreement with the mine workers’ union in Kemmerer.

A timeline of recent industry struggles in Wyoming's coal country

The long-term future of the Kemmerer mine is uncertain. As part of the sale’s terms, management of the mine will be taken over by a firm specializing in mine cleanup work – not mine management – causing a representative from the Sierra Club to speculate to the Star-Tribune several weeks ago the mine could eventually close.

The mine’s viability also depends on the market for coal. At least four coal-powered plants in Wyoming have been identified as targets for early closure, and a unit at the Naughton Power Plant in Kemmerer – which the Kemmerer mine supplies – have been shut down over the feasibility of meeting emissions regulations. Meanwhile coal giants like Cloud Peak Energy have filed for bankruptcy in recent months due to mounting debts and declining demand.

There have been some recent efforts to reduce the blow: Senate File 159 – passed by the Wyoming Legislature earlier this year – sought to create a soft landing for coal plants facing early closure, and the University of Wyoming announced a partnership with a clean coal company at the end of May on a testing facility to help “assure the future of the state’s cornerstone coal industry.”