MADISON, Wis. (AP) — A Texas industrial sand mining company’s announcement that it has devalued two of its mines marks the bleak conditions facing Wisconsin’s frac sand industry.
Hi-Crush Inc. said last week that its August and Whitehall mines have been devalued by $109.7 million and $105.7 million each. The Wisconsin State Journal reports that this is in addition to a $131 million write-off for rail cars, terminals, other assets and goodwill.
The August mine has been idle all year, and production has been cut back at the Whitehall plant.
The company says the decision resulted from an oversupply of sand and a shift to locally produced sand in the highly productive oil fields of Texas and New Mexico.
Brian Mayhew, professor of accounting at UW-Madison, says Hi-Crush recognizes the mines are not worth what they paid for them.