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Blackjewel, fearing employee theft, called cops during closure

A ‘coal smoker’ found by Wyoming Department of Environmental Quality inspectors on Aug. 30 during an inspection of the Belle Ayr mine. (Wyoming DEQ)

October 1, 2019 by Andrew Graham, WyoFile

When the manager of Blackjewel’s Eagle Butte and Belle Ayr mines called the Campbell County Sheriff’s Department on July 1 to inform the law enforcement agency the mines were closing, it wasn’t public safety he worried about, according to a deputy’s report. 

The manager wanted law enforcement on hand because he worried angry employees might steal from the business that has since been accused of shorting its workers’ retirement accounts and leaving many unpaid. 

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“On July 01, 2019, the Sheriff’s Office was notified by Joff Pilon manager for Eagle Butte Mine and Belle Air [sic] Mine they were closing the mines down because they couldn’t pay their employees,” the July 1 report read. “Pilon was requesting law enforcement be in the area on the chance employees who hadn’t been informed yet became upset and wanted to take things.”

Law enforcement responded accordingly. “Deputies responded and remained in the area to ensure nothing happened as employees left the mine sites,” the sheriff department’s report reads. “Deputies then cleared from the mines when they were no longer needed.”

Departing employees did not steal from the mine, Undersheriff Quentin Reynolds told WyoFile on Monday. 

“All those people were gainfully employed members of our community, upstanding citizens,” Reynolds said. “We didn’t have any problems that way.” 

On the three-month anniversary of the mines’ closures, the sheriff department’s report, along with mine inspection reports from the DEQ, offer new insight into what has unfolded since the coal company suddenly walked away from two of the biggest open-pit mines in the country. 

A recent DEQ report in response to a complaint by an advocacy group also disclosed that the two mines — long considered idle in media reports and manned merely by a “skeleton crew” for safety reasons, according to the company’s bankruptcy lawyers — have continued to ship coal to market. 

WyoFile did not receive a response to two emails to Pilon, the mine manager, requesting comment for this story.

SROs guarded mines

After returning from supervising the departing workers, a sheriff department captain ordered the deputies back to guard the mines through the night until officials with the Wyoming Department of Environmental Quality could arrive to secure them. Among the concerns cited for security was equipment that uses radioactive materials and thus falls under the federal Nuclear Regulatory Act, Reynolds and an explosives expert, Lieutenant Kevin Theis, said in a phone interview Monday. 

Coal mines use equipment that employs radioactive materials to analyze the quality of mined coal, Wyoming DEQ Land Quality Division Administrator Kyle Wendtland said. Within the first few days of the mine closure, both DEQ officials and federal nuclear regulatory officials inspected the equipment to ensure it was properly secured, he said. 

Other explosives, used to loosen the earth above coal and blast loose the coal seam itself, were found properly secured, Theis said. “Everything was like it was supposed to be,” he said. 

The Sheriff’s Department assigned school resource officers, available with school out for the summer, to guard the mine gates, Reynolds said. The SROs guarded the gates for three days, Theis said. The department informed Blackjewel they couldn’t guard the entire mines’ perimeter. 

“There’s no way we could guard the entire perimeter of those mines,” Reynolds said. “We didn’t have the resources, especially at a moment’s notice.”

Gillette’s law enforcement officers didn’t encounter a public safety concern, or one of vandalism or theft at the mines, Reynolds said. Instead, they worried about their neighbors. “As far as the law enforcement view, it was more alarming for our friends, family and community members that were displaced,” Reynolds said.

Three months later, those community members who haven’t moved on to jobs elsewhere remain displaced. The last two weeks saw a flurry of news reports about new potential buyers for the mines, as a deal between Contura Energy and Blackjewel appears to sour in the face of withheld federal approval. Contura continues to try and offload the mines and their associated reclamation obligations, which stretch into the hundreds of millions of dollars. 

Without a new owner to make the mines productive again, Blackjewel employees in Wyoming have yet to be compensated for money withdrawn from payroll but not yet deposited in their retirement accounts. Some miners also weren’t paid for their last days of work at the mines. 

‘Coal shipments have continued’ 

Reduced crews at the Belle Ayr and Eagle Butte mines have continued the work of mining and shipping coal, albeit at a much slower rate. That information came to light in a DEQ report responding to a complaint from landowner group the Powder River Basin Resource Council this month.

The PRBRC filed a complaint with both the Wyoming DEQ and the Federal Office of Surface Mining, alleging that Contura was violating federal and state rules by not updating its permits or annual reports for the two mines. State rules require coal companies to submit notice and update an annual mine report if they intend to cease operations for longer than 30 days, PRBRC attorney Shannon Anderson argued in the complaint, including how long the cessation will last. 

But the DEQ responded by saying the mines hadn’t ceased operations. “Coal shipments have continued during the reduced operations period with between 6 and 8 unit trains per week from July 5, 2019, to the time of this letter,” the DEQ’s response, sent on Sept. 10, said. With the mines continuing to ship coal, the company was not in violation of the rules the PRBRC claimed it was. 

DEQ’s ruling and the disclosure that the mines continue to ship coal could be interpreted as conflicting with both Blackjewel’s language in court and previous statements by regulators. 

In an update to its employees dated Sept. 12, Blackjewel described its operations as follows: “Blackjewel continues to maintain a small workforce at each mine to protect the safety and security of the mine and related equipment and ensure it is possible to resume operations when sales are complete.”

In an Aug. 14 communication with the PRBRC, Wendtland referred to the mines as “in idled status,” according to the email, which was included in the PRBRC’s complaint. “The mine [sic] are currently in idled status pending decisions to be made by the bankruptcy court,” Wendtland wrote. 

But in fact, Blackjewel continues to mine and ship exposed coal because piles of the black rock can’t sit or they’ll combust, Wendtland told WyoFile. Indeed, DEQ mine inspection reports from the days immediately after the mine closure indicate regulators found “coal smokers” — smoldering piles of coal — during their initial inspection of the abandoned mines. Inspectors also found a “smoker” on a much later inspection on Aug. 30, according to copies of the inspection reports WyoFile obtained through a public records request. 

“With reduced crews and manpower the focus has been on removing coal resources to reduce the potential for spontaneous combustion and protect the coal resource,” Wendtland wrote in a Sept. 17 email to WyoFile. “The best way to accomplish this is to mine the coal and run it through the crusher and silos to reduce potential for coal loss.”

In a phone interview on Monday, Wendtland said the estimate of six-eight coal trains was imprecise, and was a calculation based on survey flights over the mines. “We have data that shows tons [of coal] mined,” he said. “We’ve got people that have done inspections that have obviously observed the removal of coal.”

The six-eight trains, “it could have been partial trains, it could have been full trains,” he said. “There’s no way for us to know that.” For DEQ, the key question in response to the PRBRC’s complaint was the quantity of coal being mined, and whether it was sufficient to consider the mines operational. 

“Really at the end of the day the key component there is, is there tons being mined or is there not?” he said. “They are obviously in a very reduced production state but they’re still moving tons.”

On Sept. 20, the Federal Office of Surface Mining Reclamation and Enforcement supported the DEQ’s conclusion. The OSMRE response stated that the agency had conducted an investigation based off PRBRC’s complaint, the organization’s supporting evidence and the DEQ’s response, and concluded it did not need to inspect the mines for permit violations. 

“OSMRE finds that Wyoming has good cause for not taking enforcement action, because no violation exists,” the agency wrote in its response. “Because OSMRE has no reason to believe a violation exists, there is no need for OSMRE to conduct a federal inspection.”

It’s unclear at this point how much money Blackjewel would have earned from the coal shipments, or how any revenue is used. In bankruptcy, the company has gone through significant financing as it kept skeleton crews running in the mines while seeking a buyer. Last month, Blackjewel ended the out-of-work miners’ health insurance plans, saying it wouldn’t be able to afford to keep up with future costs. 

Protests subside, miners ‘overlooked’

The company filed a report on all its operations — both in Wyoming and Appalachia — for the month of July with the bankruptcy court. In July, the report stated, the company earned more than $858,000 in “sales,” and around $525,000 in “sale of assets.” Those intakes fall far short of the company’s operational costs during that period, which totaled nearly $6.5 million. 

In Kentucky, the specter of the coal company shipping out trainloads of black rock while the miners who unearthed it went unpaid sparked significant protest. Miners in that state took to the train tracks to block a coal train on July 29, according to reporting from news organization Ohio Valley ReSource. The subsequent protest garnered significant national media coverage, assistance from labor organizers and even the attention of Democratic presidential candidates. 

Wyoming has not seen any similar organized protest by its miners, who were not left with as much of their work unpaid, but have been significantly hurt by the company’s chaotic plunge into bankruptcy. What limited political response Wyoming has seen has come from vocal miners calling on the state’s politicians to do more to combat the global economic and political forces chipping away at the coal industry. 

The protest was coming to an end last week, according to a report from Ohio Valley ReSource. Hundreds of Kentucky Blackjewel miners still haven’t been paid. Most moved on to other jobs, careers and communities, the report said. 

“This happened because we got shafted, which happens all the time,” one miner’s wife told a reporter there. “You got these rich people that s*** on these poor people, and people just overlook it.”

This article was originally published by WyoFile and is republished here with permission. WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.