UMWA pushes back on possible Patriot Coal sale to Blackhawk Mining

SCOTT DEPOT, W.Va. — The president of the United Mine Workers of America is promising a strike if Blackhawk Mining out of Lexington, Ky. terminates union contracts as part of its pending purchase of the majority of Patriot Coal’s operating assets.

“We’re not going to sit back and let our people lose their jobs and everything they’ve worked for all their lives,” Cecil Roberts promised during an appearance on Wednesday’s MetroNews “Talkline.”

A letter of intent submitted to U.S. Bankruptcy Court this week detailed the proposed sale which hinges on the court’s approval.

“I would be a little hesitant to comment on that given that it’s still ongoing,” said Jesse Parrish, director of strategic planning and corporate communications at Blackhawk Mining, when asked about Blackhawk’s union plans on “Talkline.”

The bankruptcy process, he said, could take several months.

Overall, Parrish said Blackhawk’s goal with the proposed purchase is to diversify by acquiring more metallurgical coal operations.

“It’s our opinion that, by adding a metallurgical coal segment, we are positioning ourselves for recovery in metallurgical coal or thermal coal or Illinois basin coal or these other basins so that, by a move in one market, our company will benefit,” Parrish said.

With the transaction, “Blackhawk would issue to Patriot’s secure lenders new debt securities totaling approximately $643 million,” the company said.

“We feel strongly that the proposed transaction with Blackhawk is in the best interests of Patriot, and its employees and stakeholders,” Bob Bennett, president and CEO of Patriot, said in a statement.

“Blackhawk shares our dedication to operational and environmental excellence and this transaction creates a viable path forward in this challenging market environment, enabling our mining operations to continue serving customers and preserving jobs in the communities in which they operate.”

Roberts said this week’s filing indicated Blackhawk would move in court to end the UMWA contracts.

“Folks need to come forward and deal with the union and, if they do that, we’ve shown over the last 30 years that we can find a solution to about any kind of problems presented to us,” Roberts said Wednesday before speaking to active and retired coal miners in Morgantown.

“We’re not going to be left out in the cold here, really our members being left out, we’re just not going to do that.”

Assets not included in the proposed transaction with Blackhawk will be subject to a separate sale process. According to Roberts, those assets include the large Federal No. 2, Hobet and Apogee mines.

Patriot, which has eight active mines in northern and central Appalachia, filed for Chapter 11 bankruptcy in May to reorganize for the second time in less than three years. In January, the company moved its corporate headquarters from St. Louis, Mo. to Scott Depot.

Founded in 2010, Blackhawk is a privately-owned coal producer operating in central Appalachia and Illinois with five active mining complexes.

“Our company has kind of grown up in these difficult coal markets,” Parrish said.

“What is attractive to us when we look at Patriot is we think that our operational philosophy, in terms of being leaner maybe on management and the cost-cutting methods, will allow us to take these assets and optimize them for the reality that we’re in today.”





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