A New York-based business development company that specializes in managing credit and equity investments, has quietly sold its struggling Kemmerer coal mining operation in southwestern Wyoming to a Southern California real estate investment company.
The sale by PhenixFIN Corp. comes at a time when the Kemmerer mine recently announced plans to halt work on a $30 million project to move U.S. Highway 30 near the old Wyoming coal mining town of Kemmerer so that the mine owners could gain access to more than 9 million tons of coal reserves.
The area is becoming a hot real estate market to build everything from a nuclear reactor to industrial factories related to turning coal into something other than burning it in a coal-fired power plant — like cosmetics and nutrients for skin care.
This spring, the billionaire Bill Gates-backed TerraPower LLC moved forward with building his Natrium nuclear reactor in Kemmerer. The commercially powered reactor is considered the first demonstration of its kind in the United States.
Meanwhile, few details have emerged on the sale price of the coal mining operations to ECC Capital Corp., a Southern California-based specialty finance company that manages a residential mortgage portfolio.
As part of the transaction, ECC sold a 44% position in its company to PhenixFin.
A filing with the U.S. Securities and Exchange Commission (SEC) says that PhenixFin paid $4.2 million for its minority stake in ECC, while terms of ECC’s purchase of the coal mine were not disclosed.
The filing says that Kemmerer Operations had a $21.3 million loan outstanding with PhenixFin in April.
ECC President Kevin Cloyd confirmed the acquisition of the coal mine from PhenixFin in an email statement to Cowboy State Daily.
Cloyd declined to elaborate on the company’s plans for the property, and whether the sale includes the entire 13,400-acre surface mine complex.
“Beyond what is in our public filings … we do not comment on our company’s investments,” Cloyd said.
PhenixFin CEO David Lorder couldn’t be reached for comment.
Kemmerer city officials said they had not heard about the sale of the local coal mine.
“My hope is that the new owner will continue to expand the opportunities before them,” said Brian Muir, city administrator.
Muir cited opportunities with other companies that include coal-to-ammonia conversion, as well as other possibilities for repurposing coal.
"It seems like a positive to me that someone is willing to invest in the Kemmerer mine,” Muir said. "We hope their intent is to help keep the coal industry going, which would mean continued, and potentially additional, coal jobs for the coal mine families and individuals in the community."
Multiple Owners
This isn’t the first time that the Kemmerer coal mine has changed hands.
In 2011, Westmoreland Coal Co. bought Chevron Mining’s Kemmerer mine for $193 million, including 118 million tons of coal reserves.
However, the mine was seized by creditors in 2019 after Westmoreland filed for bankruptcy protection in October 2018, citing $1 billion in debt and a troubled coal market.
Former health care executive and Virginia billionaire Tom Clarke formed a new company, Western Coal Acquisitions Partners LLC, to buy the mining operation, but the attempted takeover that valued the mine at $215 million fell through.
PhenixFin entered the picture sometime in late 2019 when it bought distressed debt and equity in the Kemmerer mining operations, according to the SEC filings. PhenixFin was previously known as Medley Capital, according to the filings.
When reached by telephone Friday, Kemmerer Operations CEO Gerry Tywoniuk declined to comment, but confirmed that his mining operation is now a unit of ECC.
ECC Capital, prior to this acquisition, mainly dealt with distressed mortgages, or loans that are on the brink of going under.
This is something that ECC’s Cloyd is familiar with.
Cloyd, who has been president of Corona del Mar, California-based ECC since 2019, previously held several mortgage-related jobs over the past 30 years, including as executive vice president with New Century Financial Corp. from 2001 to 2007.
His time at New Century was during a difficult period for subprime lending, or home loans made to people with poor credit histories.
In 2007, Cloyd ‘s employer filed for bankruptcy protection amid a surge in homeowner defaults. It was considered the biggest mortgage lender to collapse in the slumping housing market at the time.
The former Irvine, California-based company — which was once located about 7 miles northeast of his current ECC headquarters along the Pacific Ocean coastline — fired 3,200 employees and sold off most of its assets.
Chicken Or Egg?
The coal mine purchase is outside of ECC’s typical business, and came prior to a letter that Kemmerer Operations President and General Manager Don Crank sent to engineers with the Wyoming Department of Transportation and local politicians about halting work on the road realignment.
“Due to current and foreseeable declining coal demand, KOL (Kemmerer Operations LLC) can no longer justify committing further resources in the form of time and funding toward advancement of this project,” wrote Crank in the letter obtained from WYDOT this week.
“This project will be moved to what we call a ‘shelf’ project, which means most of the design work is complete, and it could be picked up and constructed at a later date if funding becomes available,” WYDOT spokeswoman Stephanie Harsha told Cowboy State Daily.
The nearby Kemmerer coal mine had wanted to realign a nearly 3-mile stretch of U.S. Highway 30 to the north a little bit — about a half mile — so that it could gain access to 9 million tons of rich coal reserves. WYDOT was looking at making an 80- to 100-foot vertical cut in the hillside to the north of U.S. 30.
Another 9 Million Tons
The design process of moving the highway began in 2018, but was put on hold a few years ago, then restarted in May 2023.
Before Crank sent a letter to WYDOT halting the project, the current goal was to have plans ready to begin carving into the landscape by January and complete the work no later than 2027.
The coal downturn in Wyoming changed this strategy.
“KOL will continue to look for future coal sales that could allow us to resume this project,” Grant wrote in the letter to WYDOT engineers and obtained by Cowboy State Daily.
“We understand the tax revenue stream provided to the state of Wyoming and Lincoln County is of utmost importance, and either entity may choose to continue funding the engineering work,” Crank wrote.
The Kemmerer coal mine has the oldest active unionized workforce in the United States. The United Mine Workers of America represents more than 226 miners at UMWA Local 1307.
Downturn In Mining
The Kemmerer mine, like others in Wyoming, has struggled in a downturn across the nation. It employs nearly 200 people.
In the latest quarter that ended June 30, Kemmerer Operations reported digging up about 604,100 tons of coal, one of the lowest producing mines in Wyoming, according to data compiled by the Mine Safety and Health Administration.
The pullback in mining is coming at a time when the Kemmerer area is becoming a billionaire’s row for new investment.
The mine is in a strategic spot in Kemmerer, a scrappy southwestern Wyoming town known for coal mining and as the birthplace of James Cash Penney’s department store chain from the banks of the Hams Fork River.
While Kemmerer Operations has a variety of plans underway to keep digging the coal, converting the Naughton coal-fired plant to a natural gas-fueled one has worried local politicians and prospects. Warren Buffet-backed PacifiCorp owns Naughton.
The Kemmerer mine backs up against the Naughton power plant.
Naughton’s Future?
In recent years, local politicians have focused their attention on the lineup of big energy companies that have committed throwing billions of dollars into building new factories along U.S. Highway 189 south of Kemmerer and Diamondville.
These include the TerraPower nuclear reactor site across the road from Naughton, and plans to build a coal-to-ammonia plant nearby.
A disparate group of well-heeled investors out of Utah, Idaho, Florida, Maine and Wyoming with hundreds of millions of investment dollars have bought 136 acres of land and are digging up the landscape near the Naughton power plant to pave the way for their skincare line, among other projects they have in mind to repurpose coal.
The investors are called TriSight AG LLC, a technologies company with a “green” vision for coal that has on its drawing board plans to turn some of the coal dug up at the adjacent mine owned by Kemmerer Operations into a nutrient for skin to smooth out lines or wrinkles.
Pat Maio can be reached at pat@cowboystatedaily.com.
