The coal industry is clearly on the wane, but there’s still enough of a demand for coal that Patriot Coal. has at least two interested bidders after the union representing its workers and the second of the firm’s proposed suitors came to terms on a new contract.
Attorney Michael Slade representing Patriot commented in court that negotiations between the company, the United Mine Workers of America and proposed purchaser Blackhawk Mining resulted in an agreement on “material terms” of a new collective bargaining contract for Patriot’s unionized workers to be employed at the mines owned by the post-bankruptcy company.
A nonprofit organization reached a similar deal with the union for employees working at mines in a smaller chunk of Patriot’s assets.
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UMWA members will get a chance to vote on the new labor deal once the bankruptcy court has acceded to Patriot’s request to cancel the existing collective bargaining agreements at Patriot.
Patriot, the UMWA and Blackhawk were not yet prepared to comment on Thursday afternoon.
Details on Patriot Coal bankruptcy proceedings
Earlier in the week, bankruptcy court Judge Keith Phillips highly recommended to both sides that they sit down to try and hammer out a new labor deal.
According to the Wall Street Journal, all sides thanked the judge for essentially forcing the negotiations, which took place in Wednesday and lasted 8 and half hours. “I know I’ve put the parties to task, but hopefully it was worth the effort,” Judge Phillips commented on Thursday. “I’m very pleased you were able to work this out.”
Low-cost coal producer Blackhawk already has a deal on the table to pay around $650 million in debt to Patriot Coal’s creditors in return for the large majority of its mines, and the nonprofit Virginia Conservation Legacy Fund will take on the $400 million in liabilities related to Patriot’s remaining mine assets.
Partial Patriot acquirer VCLF announced earlier it plans to continue operating Patriot’s Federal mining complex and to launch reforestation efforts on the land it was acquiring.
Bids in the bankruptcy auction for Patriot Coal’s assets close on Friday, September 4th, and an auction is scheduled for next week if necessary. Of course, the winning bids must be approved by the bankruptcy court.