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Front Page » May 14, 2009 » Carbon County News » DOGM orders Bear Canyon coal mine to cease operations
Published 2,043 days ago

DOGM orders Bear Canyon coal mine to cease operations


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By PATSY STODDARD
Emery County Progress editor

Utah Division of Oil, Gas and Mining director John Baza recently updated the Emery County Public Lands Council on energy production in the state.

During his comments, the DOGM director brought up the situation at Bear Canyon mine.

Baza said Bear Canyon mine has been ordered to cease operations by the division. He said the company can finish the current long wall panel, but cannot work for future development.

The mine is located up the canyon about 10 miles from Huntington. Mining operations began between 1896 and 1906.

Co-Op Mining Company acquired the Bear Canyon area leases from Peabody Coal Company in 1975 and re-entered the old workings in 1982.

The mine is notable for a labor dispute that took place in late 2003 and early 2004 when some workers were let go and months long picketing efforts materialized concerning the operations of the Co-Op Mining Company.

The order to cease operations goes back to a compliance action from last year.

At that time, CW Mining sold the company to Hiawatha Coal.

They tried to transfer the permit and submitted an application, but the required paperwork and the posting of a bond in the name of the Hiawatha Coal Company wasn't completed.

Baza said DOGM determined that, with the CW Mining in bankruptcy court, the agency wasn't in a position to do a permit transfer because the situation was too complicated.

Actions were not being taken by the coal companies to complete the permit transfer so DOGM officials felt they had no other recourse than to issue the cessation of operations order in February.

"We didn't felt like we could do anything else," said Baza.

Hiawatha Coal Company is prevented from working on the change of application and bond due to the cessation order.

The bankruptcy court determined the trustees in the court case will now make the decision on whether to allow Hiawatha Coal to continue to mine so the trustees will get their money or the trustees could determine to allow another coal operator to mine the coal.

The bankruptcy court said CW Mining did not properly sell the operation.

They allege CW Mining sold the mine to Hiawatha Coal Company and then declared bankruptcy in order to avoid paying creditors.

DOGM indicates the agency will work with the trustees to get the Hiawatha Coal Company permitted if that is the course they choose. The trustees have until the middle of June to make a decision on the coal operator.

"The mine will reopen, there is just too much coal there to just leave it," stated Baza.

Baza said he has alerted his coal program director, Dana Dean, to stay alert. Water issues could come up in connection with the mine. Baza said they have also notified the Office of Mine Safety advised them to keep track of the situation.

Baza said he doesn't have the exact number of employees, but any closure for any length of time will affect the economy of Emery County.

In November of 2008 the Emery County Progress talked with Charles Reynolds, president of the CW. Mining Company.

At the time, he stated that the company had been sold which would allow it to continue operating and employing miners as well as the related trucking companies that haul coal from the Bear Canyon mine.

He told the Progress that in October, 2007, Aquilla, Inc. was awarded a $24.8 million judgement against CW. Mining Company, operator of the Bear Canyon Mine. He also said that CW Mining Company attempted to negotiate a settlement with Aquilla Inc. which would allow CW. Mining Company to continue to operate and stay in business.

However, Aquilla Inc. refused to respond to any settlement offers.

Instead, Aquilla garnished CW Mining's bank accounts, notified all of the company's creditors that it was unable to pay its bills and filed a petition for an involuntary bankruptcy against CW Mining, making it impossible for the company to continue in business.

After several months of attempting unsuccessfully to settle with Aquilla, CW Mining Company sold the assets of the Bear Canyon in an effort to keep the mine operating and protect the jobs of its employees.

The mine was sold to Hiawatha Coal Company. The company is the current owner of the old Hiawatha coal mine.

"The sale of the mine will allow the Bear Canyon mine to continue to operate under the new ownership, protecting the jobs of the employees, since Hiawatha Coal Company is not a party to the bankruptcy," said Reynolds at the time.

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