Wyoming Court: DEQ Must Release Contura Coal Mine Bond Documents

The Wyoming Department of Environmental Quality must release land appraisal documents related to the bond renewal for the Belle Ayr coal mine in Campbell County, a state district court judge ruled this week.

The Powder River Basin Resource Council, which brought the Public Records Act lawsuit in February, praised the decision as victory for taxpayers and government transparency, the council's chairwoman said in a news release.

“We are pleased that the judge agreed with us that this needs to be an open, transparent process in order to protect Wyoming’s taxpayers from taking on too much risk," Joyce Evans said.

"Contura is the first coal company to use a real estate bond for reclamation, but they may not be the last, and we need to know that companies are being up-front in this important process. Had this appraisal been allowed to remain confidential, it would have set a dangerous precedent for other coal companies to do the same,” Evans said.

“The Wyoming people would have remained in the dark, not knowing if they were getting a good deal or not," she said. "Ensuring that mines have adequate bonds in place for reclamation and cleanup is vital to the well-being of our state.”

DEQ spokeswoman Kristine Galloway this was not an adversarial case.

"We had never had a case with appraisal records such as these," Galloway said.

The Public Records Act requires state agencies to release records as well as determine if some records should remain confidential.

"So when Contura asked for them to be confidential, we reviewed them in relation to the Wyoming Public Records Act and made a determination that they could be kept confidential," she said.

"We welcomed the challenge by the Powder River Basin Resource Council for clarity on such a situation," Galloway said. "With the judge's ruling, we gained that clarity we had hoped for."

With that resolved, the DEQ will release the records to the Powder River Basin Resource Council, she said.

The situation with the Belle Ayr mine is unusual, Galloway said.

The Milton, W. Va.-based Blackjewel LLC owns the mine and has the license to mine. Blackjewel filed for Chapter 11 bankruptcy business reorganization on July 1, closed Belle Ayr and Eagle Butte mines and about 30 others in West Virginia, Virginia and Kentucky, and sent 1,700 employees home. The case is still in bankruptcy court in West Virginia.

However, Contura has the mining permit, which has not been transferred to Blackjewel.

Because Contura has the permit, it holds the bonds to pay for a third party reclamation should the mines file for Chapter 7 bankruptcy liquidation. If that were to happen, the state would collect on those bonds, Galloway said. Whoever holds the permit is responsible for those bonds.

The Powder River Basin Resource Council objected to the DEQ's approval of the transfer of the permit to Blackjewel, saying the agency's appraisal of ranches used by Contura as collateral was too low and could leave taxpayers holding the bag for the reclamation of the mine.

The DEQ claimed it followed state law in approving the permit transfer, Galloway said.

It also stands by its appraisal of less than $30 million for the ranches that Contura is using as collateral for its $250 million in bonds. she said.