Monday, May 13, 2019

Third-largest U.S. coal company, Cloud Peak Energy of Wyoming's Powder River Basin, files for bankruptcy

The nation's third-largest coal company by production filed for Chapter 11 bankruptcy after failing to make a $1.8 million loan payment despite several deadline extensions.

The move could signal the beginning of the end for Cloud Peak Energy, based in Gillette, Wyo., Greg Johnson reports for the Gillette News Record: "Unlike previous Powder River Basin coal bankruptcies, Cloud Peak seems to be looking to shed debt and sell its assets rather than emerge as an ongoing company. What that means for the more than 1,250 employees at Cloud Peak’s three PRB mines — Cordero Rojo and Antelope in Wyoming and Spring Creek in Montana — is that for now, their jobs are safe, said Robert Godby, director of the Center for Energy, Economics and Public Policy at the University of Wyoming."

The company said it will continue normal operation of its three mines throughout the bankruptcy process, but it's unclear what will happen after Cloud Peak sells its assets.

"The real question here is, will there be buyers for all those mines?" Godby told Johnson. "They have different qualities of coal, different customer bases. . . . There is not a core of assets they’re looking to reorganize around. They’re looking to spin these off to any potential bidder."

It's also unclear whether Cloud Peak will pay local taxes it owes, and continue paying employees' health-care and pension benefits. On Friday, Cloud Peak paid Campbell County "more than $617,000 for the last half of its 2018 property taxes," Johnson reports. "It hasn’t, however, paid $8.3 million owed for the last half of 2018’s ad valorem taxes on coal production."

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