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Judge allows Contura to buy W.Va. mine as talks over PRB coal mines continue

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Judge allows Contura to buy W.Va. mine as talks over PRB coal mines continue

A bankruptcy judge approved a proposal to allow Contura Energy Inc. to separately purchase a metallurgical coal operation from Blackjewel LLC as negotiations with the federal government over two Powder River Basin thermal coal mines continues.

Earlier this month, the company asked the U.S. Bankruptcy Court for the Southern District of West Virginia to allow it to bifurcate its original $33.8 million winning bid for Blackjewel's western thermal coal mines and an eastern metallurgical coal mine into two separate transactions. U.S. Bankruptcy Judge Frank Volk approved the motion at a hearing on Aug. 28, pending receipt of a formal proposed order.

An attorney for Blackjewel told the bankruptcy court at the hearing that negotiations with assorted government agencies related to the Eagle Butte and Belle Ayr mines in the Powder River Basin are ongoing.

Volk originally approved the sale of the mines to Contura on the condition that it received various governmental approvals that have not yet been secured. Bifurcating the sale would give the cash-strapped debtor the opportunity to receive a payment of $1.1 million in cash and access to $5.1 million of the purchase deposit Contura included in its original bid, Blackjewel wrote in its Aug. 22 motion.

There were no other bids on the Powder River Basin or Pax assets. The company said on its recent earnings call that if it completes the purchase of the Powder River Basin mines, it would consider a number of options going forward including resale of the mines or shortening the expected life of the mines and proceeding to reclamation.