Billionaire backs out of Kemmerer mine sale

An excavator is shown at the Kemmerer coal mine. A Virginia businessman was the only bidder when bankrupt Westmoreland Resource Partners put the mine up for sale, but now he’s backed out of the deal after several complications. (COURTESY PHOTO)

KEMMERER — Virginia billionaire businessman Tom Clarke has withdrawn his bid to buy the Kemmerer coal mine from the bankrupt Westmoreland Resource Partners. The $215 million bid in February from Clarke’s company was the sole offer for the Kemmerer mine. 

Clarke’s withdrawal from the sale was discussed in a conference call on Tuesday, April 30, with Westmoreland legal representation and bankruptcy court officials. No court documents regarding the withdrawal have been filed as of press time, and there are no hearings scheduled for the Westmoreland case.

United Mine Workers of America District 22 vice president Mike Dalpiaz said Clarke’s withdrawal did not surprise him or other union leaders.

“Clarke was swimming against the current, and he lasted longer than we thought he would,” Dalpiaz told the Gazette on Wednesday. “We did negotiate with him. If he could have fulfilled those reclamation obligations, I would have been able to bring a collective bargaining agreement to my guys.”

In February, a bankruptcy judge gave Westmoreland permission to end collective bargaining agreements with union workers at the Kemmerer mine, throwing the future of employee healthcare and retiree pensions into jeopardy. 

In order for the sale to become final, Clarke had until the end of April to secure funding for federally-mandated reclamation bonds, and he failed to do so. The bonds are required by the Department of Environmental Quality and the Surface Mining Control and Reclamation Act of 1977. They ensure that coal mines are reclaimed after operations end or in the event of an untimely closure. 

“It’s a hell of a reclamation obligation at the Kemmerer mine,” Dalpiaz said. “The mine has been there more than 100 years. Who knows who has the money to pay for that?” 

Westmoreland Coal declared bankruptcy in October 2018, and has since sold or reorganized most of its coal mining assets. The Kemmerer coal mine has been in operation for decades. 

It is the largest open pit coal mine in the nation and has an annual output of 5 million tons. Nearly 300 people are employed by the mine. 

Westmoreland, which now has more than $1.4 billion in debt, bought the Kemmerer mine from Chevron in January 2012. 

Dalpiaz said he treats negotiating with mine buyers like “negotiating with ghosts, because it’s not quite real yet.”

“You just have to hope that the ‘ghost’ becomes reality,” Dalpiaz said. “Clarke was a ghost. But we have made good negotiating progress with another potential buyer.” 

Dalpiaz said the Kemmerer mine is facing several hurdles: high reclamation costs, employee and retiree benefit funds, and the potential decisions by the utility that owns the Naughton power plant. 

“Another monster over my shoulder is Pacificorp talking about closing (power plant) units across Wyoming,” Dalpiaz said.

“So what do we as the union do now that Rocky Mountain Power has jumped in the driver’s seat?” Dalpiaz continued. “Our coal has to go somewhere. We’ll continue to fight for the miners and the retirees.”

The Kemmerer mine sale hold-up began in March when the recently-organized Westmoreland Mining Holdings filed a complaint in bankruptcy court in Houston, Texas. 

The complaint by the lenders called for the court to enforce the reclamation bond agreement before finalizing the sale of the mine to Clarke. 

Now that Clarke is no longer a contender in the sale, Westmoreland’s secured lenders may make a bid for the mine that would include the reclamation bonds.

Would-be buyer Clarke faced similar challenges in his bid to buy Westmoreland coal mines in Ohio in February. 

The Ohio Department of Natural Resources filed an objection. The complaint cited concerns that Clarke’s company lacked the ability to pay for environmental liabilities and reclamation funding at the mines. Clarke’s Ohio bid was unsuccessful. 

Clarke is a relatively new player in the coal market. But data from the Mine Safety and Health Administration shows that his company racked up $736,000 in mine safety violations from just two mines. 

Dalpiaz said the ownership crisis at the Kemmerer mine has been like “throwing stones back and forth.” 

“They cannot get along,” Dalpiaz said. “There’s one group that says ‘You ran the company into the ditch,’ then another group says, ‘No, you did that.’”


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