No bail-out for Westar

The British Columbia government agreed to defer some taxes and bond payments, but it won’t be bailing out Westar Mining, a cash-strapped coal producer which earlier this year placed itself under court protection from its creditors.

The company’s financial problems are being exacerbated by labor problems at the Balmer mine where workers have been on strike since May. Balmer and the nearby Greenhills operation are in southeastern British Columbia’s Elk Valley, the riding of the province’s Mines Minister Anne Edwards. In recent months, Edwards has received increased criticism for her lack of action in dealing with the crisis facing the province’s coal producers. If Westar is not able to work out a financial restructuring or resolve its labor problems at Balmer, any resulting mine closure would have a major impact on the communities of Sparwood, Fernie and Elkford, as well as on the provincial economy. Westar has until Sept. 30 to work out a restructuring plan acceptable to its creditors.

Meanwhile, doubt is growing that Black Swan Gold Mines (VSE) will be able to raise the necessary financing to acquire the Cassiar asbestos mine which was shut down earlier this year when its former owner ran into financial difficulties. The mine was the primary employer of residents in the northern community of Cassiar, B.C.

Black Swan has already missed one deadline, and another is looming. If the company is unable to arrange the financing, receiver Arthur Andersen will likely apply for court permission to auction off the assets within the next several months.