GILLETTE, Wyo. — A federal bankruptcy court has approved a schedule for selling a financially struggling coal company with mines in the Powder River Basin of Wyoming and Montana.
The Gillette News Record reports that bids for Cloud Peak Energy's assets will be accepted until 3 p.m. July 8. If necessary, an auction will be held July 11. A final hearing on approving a potential sale has been set for July 18.
Cloud Peak operates the Antelope and Cordero Rojo coal mines in Wyoming and Spring Creek mine, which is Montana's largest. It's being forced to sell its assets to cover nearly $400 million in outstanding debt.
Rob Godby of the University of Wyoming Center for Energy, Economics and Public Policy says it's difficult to tell how much interest there will be.
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Cloud Peak's creditors have the opportunity to submit a stalking horse bid, which would establish a minimum amount for acceptable offers on some or all the mining company's assets. The creditors would take possession of the assets as payment should another acceptable bid not materialize.
The year to date has been rough for Powder River Basin coal. Cloud Peak filed for bankruptcy May 10. Westmoreland Coal Co., the Colorado-based former owner of three coal mines in Montana, emerged from bankruptcy in March.
Last week, Talen Energy announced that the oldest two units in the four-unit Colstrip Power Plant complex would close by year's end. Talen said the units to shutter in December weren't economical. Colstrip's owners have been in a prolonged coal pricing battle with the owners of Rosebud Mine, currently owned by Westmoreland creditors.
Earlier this year, Montana Dakota Utilities announced that in 2020 it would close its Lewis and Clark Generating Station near Sidney. MDU will close the two-unit Heskett Station in Mandan, North Dakota, in 2021. The company said the coal-fired power plants could not compete with cheap electricity generated with natural gas or renewable energy.