Contura Energy Inc. completed a transaction related to surety bonds for the Eagle Butte and Belle Ayr thermal coal mines in the Powder River Basin, allowing their transfer to FM Coal LLC affiliate Eagle Specialty Materials LLC.
Coal producer Blackjewel LLC, which filed for bankruptcy protection in July, recently secured federal court approval to sell the mines, which were previously owned by Contura Energy. To close the deal, Eagle Specialty Materials was required to obtain replacement bonding to guarantee reclamation obligations.
Contura Energy said Oct. 21 that Eagle Specialty Materials replaced surety bonding posted by its subsidiary Contura Coal West LLC with the Land Quality Division of the Wyoming Department of Environmental Quality. The substitute surety bonds for the mines total approximately $238 million.
"In our view, this transaction represents a best-case-scenario outcome to a lengthy and uncertain process, putting the mines in the hands of an operator with a long-term interest in the Powder River Basin, and getting hard-working coal miners back on the job," Contura Energy Chairman and CEO David Stetson said in the statement.
Contura Energy and its Contura Coal West unit will not have any liability in connection with the substitute surety bonds, with Contura Coal West anticipating the return of approximately $9 million of cash collateral related to its previous surety bonds, which are being released as part of the agreement.