The U.S. Interior Department filed a limited objection to Blackjewel LLC's proposal to sell six of its Kentucky coal mines to Black Mountain Resources LLC, citing concerns about transferring the federal leases and liabilities.
The DOI, along with the U.S. Bureau of Land Management, Office of Natural Resources Revenue, Office of Surface Mining and Reclamation Enforcement and the U.S. Environmental Protection Agency, filed the limited objection Oct. 1 with the U.S. Bankruptcy Court for the Southern District of West Virginia.
Blackjewel, as part of its bankruptcy proceeding, recently asked the court for approval to sell the assets to Black Mountain Resources LLC in a private sale.
The debtor has at least 10 federal coal leases for three of its mines and two mineral materials sales contracts with the BLM, according to the filing. The proposed sale would include transferring two federal coal leases pertaining to the Beechfork mine and assigning them to Black Mountain "free and clear of all liens, claims, interests and encumbrances."
But the DOI will not allow the leases to be assumed by or assigned to another party until the debtors agree to pay nearly $145,000 in outstanding unpaid royalties, rentals and interest owed to the Office of Natural Resources Revenue under the leases or provide assurance that it will be taken care of promptly, the filing said. Otherwise, Black Mountain or another potential assignee must agree to the leases' provisions.
Blackjewel is also prohibited from assuming and assigning the leases without the DOI's consent, according to court documents. Black Mountain indicated to the department that it was not able to agree to pay the cure amount before an Oct. 2 sale hearing, but the executive department will continue negotiating with the proposed buyer.
"DOI, indeed, does not consent to any such assumption and/or assignment absent a full cure or adequate assurance that it will promptly be cured and adequate assurance that the assignee would comply with all lease obligations and applicable statutory and regulatory obligations, including all environmental obligations," the filing said.
