By Associated Press - Monday, June 8, 2020

GILLETTE, Wyo. (AP) - A bankruptcy court judge is allowing an international equipment company to try to repossess two building-sized shovels crucial to the operation of two Wyoming coal mines.

Komatsu Mining Corp. may begin the process of foreclosing on the shovels at Eagle Specialty Materials’ Eagle Butte and Belle Ayr mines in Powder River Basin, Judge Benjamin Kahn of the U.S. Bankruptcy Court for the Southern District of West Virginia ruled June 2.

How that might happen remains to be seen. Repossessing the five-story-tall shovels would be more complicated than repossessing a car, Komatsu attorney Richard Parks said in court.

Komatsu claims the mines’ current and previous owners owe millions of dollars on a maintenance contract for the shovels, the Gillette News Record reported.

Eagle Specialty Materials acquired the mines for $40.2 million following the bankruptcy of previous mine owner Blackjewel in 2019. The shovels weren’t included in the sale.

Eagle Specialty Materials and Blackjewel don’t dispute that they owe on the shovels. The question is how much, Eagle Specialty Materials attorney Steven L. Thomas said in court.

The two mines closed when Blackjewel filed for bankruptcy last July, putting more than 500 miners out of work. The bankruptcy, which also put miners out of work in Appalachia, was among the more disruptive amid several in the U.S. coal industry due to declining use of the fossil fuel.

Eagle Specialty Materials’ purchase of the two Wyoming mines allowed them to reopen and miners began returning to work in late October.

Eagle Specialty Materials and Komatsu planned to negotiate a resolution to the shovel dispute after the mines’ sale, Blackjewel attorney Stephen Lerner said.

They haven’t reached agreement. Eagle Specialty Materials and Blackjewel shouldn’t be expected to pay a bill without seeing justification for how much they owe, Thomas said.

“They can’t just file something and say we’re owed millions of dollars and everybody just says, ‘Well, you must be right because you’re Komatsu,’” Thomas said.

Blackjewel still holds title to the shovels even as Komatsu has a valid lien and Eagle Specialty Materials continues to use the equipment, said Parks, the Komatsu attorney.

“They want to ignore the facts, they want to ignore the contract terms,” Parks said.

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