Page 2 of 3
Official Utah records and a recent business prospectus issued by Bowie show that Bowie Resources bought the Sufco mine in 2013 from Arch Coal, one of the largest US coal companies. In financial reports from previous years, Arch Coal described the Sufco mine as facing a significant production decline, because its existing leased coal reserves were depleted. But in a prospectus filed with the Securities and Exchange Commission in June, Bowie's executives explained their business strategy: Bowie is seeking access to a vast coal deposit, not in the Sufco mine, but in an area accessible through the mine known as the Greens Hollow Tract, which is buried under the Fishlake and Manti-La Sal National Forests in Utah. "We expect to obtain a lease from the [Bureau of Land Management] through the lease by application process for the Greens Hollow tract, which contains approximately 50.5 million tons of non-reserve coal deposits, including those in the Lower Hiawatha seam, accessible through our Sufco mine," the prospectus states.
"[W]e expect long-term international demand for thermal coal to increase," Bowie executives wrote in the prospectus. "Given our low cost of production [...] and unique access to U.S. West Coast terminals, we believe we will be competitive selling our coal into the seaborne market in the future."
James Wolff, chief financial officer of Bowie Resources, declined to comment about Bowie's plans. Representatives of Trafigura, a Swiss commodities trading corporation that owns 46 percent of Bowie and sells its coal in overseas markets, also declined to comment on its plans for the Utah coal.
Records show that Holt, the Utah public official spearheading the Oakland deal, could personally profit from it. During his time as Utah's transportation commissioner, Holt has worked to convince county commissioners in resource-rich parts of Utah to use public funds for fossil fuel infrastructure projects. In 2014, Holt also signed a contract with Sevier County to be the county's financial advisor to help it build the Central Utah Railroad, which would transport Sufco coal to the Union Pacific Railroad's mainline, and then on to Oakland. According to the contract's terms, Holt and the Bank of Montreal will receive at least $2 million from Sevier County taxpayers if the railroad is built, regardless of whether the Oakland deal goes through.
Holt did not return emails or phone calls seeking comment for this report.
Bowie Resources, Holt, and Tagami face increasing resistance in Utah and Oakland. In Utah, environmentalists are appealing a decision by the US Forest Service and US Bureau of Land Management (BLM) to lease the Greens Hollow Tract to Bowie. Meanwhile, some Utah residents and officials believe that the Utah Permanent Community Impact Fund Board (CIB) has been hijacked by Holt and others to illegally subsidize the fossil fuel industry. And in Oakland, a coalition of community groups and environmentalists are searching for ways to ban coal exports from the Army Base terminal.
Taylor McKinnon of the Center for Biological Diversity said in an interview that his group has already appealed the US Forest Service and BLM environmental impact statements for the proposed coal lease of the Greens Hollow Tract. "If they deny our objections out of hand, we'll consider taking the Forest Service and the BLM to court," said McKinnon.
Jeremy Nichols of Wildearth Guardians, another group fighting the Greens Hollow Tract mineral lease, said expansion of the Sufco mine would damage habitat in the region, and worsen global warming.
According to Chris Baird, a commissioner of Grand County, Utah, CIB dollars come from federal mineral leases and are supposed to mitigate the harms of fossil fuel extraction. For years the CIB has made grants and loans to build schools, fire stations, and water treatment plants. But according to Baird, when Holt was on the CIB the board, he and other board members attempted to use CIB funds to build a railroad into the Uintah Basin to serve oil companies interested in extracting tar sands deposits. That deal fell through. The $53 million loan for coal exports through Oakland is the latest example of Holt and other Utah officials steering CIB money into fossil fuel projects, according to Baird. But this time, Holt has been working not as a CIB board member, but as a private investment banking consultant who stands to profit from the deal.
"I see it as straight up subsidization," said Baird. "All this money they are spending won't go into projects like senior centers."
"In my opinion, recent decisions of the Community Impact Board violate state and federal law," said Christina Sloan, a Utah attorney who has also criticized the fossil fuel infrastructure projects promoted by Holt.
In Oakland a coalition of community groups and environmentalist say they welcome investments in the Army Base — so long as fossil fuel exports are excluded. "If they want to invest $53 million, we welcome it, but not for coal," said Lora Jo Foo, an Oakland resident and member of the Oakland Fossil Fuel Resistance coalition.
On August 4, Foo and Aaron Reaven, a member of the environmental group 350 Bay Area, traveled to Utah to a CIB board meeting. "We handed out a packet to all the CIB board members at eight in the morning, so they all know, here's ten reasons Oakland may not accept your investment if it includes coal," said Reaven.