August 16, 2019 - Nearly 600 locked-out Eagle Butte and Belle Ayr coal miners waiting for a call to return to work may not get that call.

While Contura Energy Inc. continues to negotiate with the federal government to close its deal to buy the mines from bankrupt Blackjewel LLC, the deal may not be completed before Blackjewel runs out of money and has to liquidate the mines. That was one of the takeaways from Contura’s 2019 second quarter earnings call Wednesday morning.

If that happens, Contura, which sold the mines to Blackjewel in 2017 and is still on the hook to reclaim them, would move into full reclamation mode, said Andy Eidson, the company’s chief financial officer.

Recognizing that the sale “is wholly dependent on reaching an agreement” over federal leases, Blackjewel is “on a pretty tight clock on day-to-day operating funds,” Eidson said. “It’s not an absolute certainty an agreement will be reached before (Blackjewel has to convert its Chapter 11 bankruptcy to) Chapter 7.”

Eidson said if that’s the case, Contura has crunched the numbers and believes it can do the required reclamation at the Eagle Butte and Belle Ayr mines for about $100 million over a period of eight to 10 years. While the company has bonded for about $250 million to do that work, the bond amount is a high-end projection of reclaiming the land that includes things like buying expensive equipment Contura already has.

The preferred outcome continues to be reaching an agreement with the federal government and reopening the mines, Eidson said. However, Contura also is prepared for the alternative. Going straight to reclamation is “certainly something we would rather not deal with, but if this is the way we have to deal with it, we believe the net impact to the company would be very manageable going forward.”