SCOTT DEPOT, W.Va. — Hours before members of the United Mine Workers Union planned to demonstrate outside their headquarters, Patriot Coal announced a second buyer has been found for some of its mining assets in West Virginia.
ERP Compliant Fuels, an affiliate of Virginia Conservation Legacy Fund, would take over nearly all of Patriot’s assets and liabilities not included in the previously announced sale agreement with Blackhawk Mining. The proposed sale is now filed as part of Patriot’s Chapter 11 reorganization plan in Federal Bankruptcy Court.
ERP Compliant Fuels would acquire the Federal Mining Complex in northern West Virginia and the Corridor G mining complex in southern West Virginia along with other Patriot assets. The buyer would assume Patriot’s responsibilities of land reclamation and water quality improvement. VCLF/ERP is assuming liabilities in excess of $400 million in connection with Patriot’s workers’ compensation, state black lung and environmental obligations. In addition, VCLF/ERP would assume or replace surety bonds supporting reclamation and related liabilities associated with the purchased assets according to a company press release.
“We are pleased to have reached this agreement to sell substantially all of Patriot’s remaining assets and liabilities to VCLF, which enables us to take another important step forward in Patriot’s chapter 11 process,” said Bob Bennett, President and CEO of Patriot in the release announcing the proposed purchase. “In VCLF, we have found an experienced partner who will responsibly manage our remaining assets consistent with the highest environmental standards, and we believe this proposed transaction is in the best interest of Patriot and its stakeholders.”
Bennett added the previously announced sale of other assets to Blackhawk mining is also moving forward. He anticipated most, if not all, current Patriot employees would be offered jobs with one of the two purchasing companies.
“This agreement is a landmark achievement for VCLF, allowing us to increase Appalachian employment through the reclamation and reforestation of thousands of acres of land. Continued mining at Federal will allow us to launch our ‘compliant fuel’ program which bundles reforestation carbon credits with coal sales, effectively reducing carbon emissions, as required under the new emission standards.” said Tom Clarke, CEO of Virginia Conservation Legacy Fund. “We expect to maintain employment in West Virginia at the current 683 employee level and expand employment through our investment of up to $176 million in land reclamation, reforestation and water quality improvement.”
The proposed sale is subject to the approval of federal bankruptcy court and could be rejected if higher offers are made.
The Patriot press release did not indicate whether the addition of VCLF and ERP to the bankruptcy filing will satisfy the concerns and objections raised by the United Mine Workers. The UMWA is angered over a move to scrap the collective bargaining agreement reached between the union and Patriot during the previous bankruptcy filing and the contributions to UMWA retirees’ pensions.