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Belle Ayr's Coal Mine in Wyoming in Danger of Closing

Coal News - Published on Tue, 16 Jul 2019

Image Source: CBS News
CBS News reported that Belle Ayr, a strip mine that sits in the northeast corner of Wyoming, was the very first strip mine to open in the West back in 1972, kicking off a shifting of the coal industry from the eastern US to the Powder River Basin, which straddles Wyoming and Montana. It closed on July 1 and could be shuttered permanently, a sign of the shifting fortunes of the coal market as much as the poor management that ran it into bankruptcy. Belle Ayr and the adjacent Eagle Butte mine shuttered a few hours after its operator, Blackjewel LLC,the country's sixth-largest coal producer, abruptly filed for bankruptcy protection. It had about Usd 250 million in debt and less than USD 100,000 in the bank not enough to cover payroll. Closing down a mine was unheard of in the region, but coal bankruptcies have become common. Cloud Peak Energy filed for bankruptcy in May and is searching for a buyer for its three mines in the region. Westmoreland Coal, in neighboring Montana, filed for bankruptcy last November.

Mr Robert Godby, director of the Center for Energy Economics and Public Policy at the University of Wyoming, said that "The Blackjewel bankruptcy you could consider the 'heart attack moment' in the Powder River Basin. When you realize that changes have to be made. There are too many mines, too little demand, and that's been driving prices down. In that situation, you'd expect the weakest most costly mines to shut down or retire first."

A decade ago, the region produced 450 million tonne of coal a year, most of it sold to customers out of state. That figure has since dropped to 300 million, as less and less of the rock is used across the US. What's pushing it over the edge is the arrival of cheap fracked gas—which already has taken much Appalachian coal out of commission in places like West Virginia—west of the Rockies.

Now, with the extraction industry booming in West Texas, cheap natural gas is flooding the West, reaching states like Missouri, Illinois and Wisconsin, which were traditional energy markets for Wyoming.

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Posted By : Sanju Moirangthem on Tue, 16 Jul 2019
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