Frac Sand Company Liquidating Western Wisconsin Mine

A frac sand mining company that declared bankruptcy last year is liquidating one of four Wisconsin mines.

Prior to the filing, Texas-based Hi-Crush Proppants was one of the state’s biggest producers of sand used in hydraulic fracturing for oil and natural gas.

Hi-Crush’s mine in the city of Whitehall opened in 2014 and boasted a production capacity of nearly 3 million tons of frac sand per year. At the time, the price of oil was peaking at more than $100 per barrel and demand for Wisconsin’s “northern white” sand was prized by energy companies for its uniformity and strength.

But over the past four years, oil companies — especially those in and near oil fields in Texas — started using cheaper sand found closer to oil wells. By switching, energy companies could save as much as $60 per ton by not having to ship sand from Wisconsin.

The market shift dealt a heavy blow to Wisconsin sand mines. In 2019, Superior Silica Sands, declared bankruptcy and idled mines in Chippewa and Barron counties. That was followed by bankruptcy filings from Covia Holdings Corp., which operates amine in Menomonie, and Hi-Crush.

On Friday, Heritage Global Partners started accepting bids for a “global private treaty offering” of Hi-Crush’s Whitehall sand production facility. An employee for Heritage said it’s essentially a liquidation sale of the operation or individual pieces of equipment.

Roberta Walls, a Wisconsin Department of Natural Resources industrial sand mining specialist, said the COVID-19 pandemic has put further strain on demand for Wisconsin sand.

“But because industrial sand mining had already been at a low because of market conditions going into the pandemic, we are aware that quite a few of our industrial sand facilities either look to begin final reclamation and get out of nonmetallic mining for sand or to sell off the businesses,” said Walls.

Walls said Wood and Barron counties have also had to use money set aside by frac sand companies to reclaim mine sites following bankruptcies.

Tim Jacobson is an attorney in La Crosse who is representing a group of landowners living near Hi-Crush’s Whitehall mine. The lawsuit allege blasting, noise pollution and others issues with well sedimentation and contamination.

“We had been told by the attorneys for Hi-Crush that they were closing down the Whitehall facility,” said Jacobson. “I was not aware that an auction had actually been scheduled.”

Walls and another DNR official said the news took them by surprise as well.

Jacobson said it’s unclear if the sale of the Whitehall facility and equipment means the mine will cease to exist.

“When I look at the auction documentation,” said Jacobson, “it appears that they are attempting to sell this as an ongoing and viable operation, that somebody could apparently buy it, take over, step in and continue to do mining and processing of sand, which means the problem remains and how these homeowners are going to be affected.”

Hi-Crush’s Whitehall mine was the site of a massive industrial spill in 2018 when the company emptied more than 10 million gallons of muddy water ladened with high concentrations of heavy metals from a holding pond in order to save a worker whose bulldozer slid into the basin and remained underwater for two hours. The DNR didn’t issue any citations to the company for the spill.