Companies Will Hire Workers, Resume Production at Four Kentucky Coal Mines

 

 

November 2, 2021 - Companies tied to West Virginia Gov. Jim Justice plan to resume coal production at several surface mines in Eastern Kentucky, including two where state regulators argue Justice missed deadlines to finish reclamation, according to the president of the companies. 

 

Jim Justice’s son Jay, president of the Justice Companies, said companies have begun work to start producing coal at the Bevins Branch and Beech Creek mines in Pike County, the Bull Creek mine in Knott County and the Infinity mine in Harlan County. 

When all four are up and running, they will employ 120 people in mining jobs and another 30 in support positions, Jay Justice said. 

The mining also will produce tax revenue for the state and local governments and help get reclamation done, Justice said. 

 

“It’ll do a lot of good on a lot of fronts,” Justice said Monday. 

The Infinity and Bevins Branch mines were among five covered under a 2019 agreement to settle a lawsuit by the state against Jim and Jay Justice and several family coal companies. 

The Kentucky Energy and Environment Cabinet argued in the lawsuit that the Justices had reneged on a prior agreement to fix environmental and reclamation problems at mines. The work included cleaning out ponds designed to keep sediment out of streams, stabilizing landslides, monitoring water quality and eliminating highwalls. 

Highwalls are cliffs left when a company cuts into the side of a mountain to reach coal. Federal law requires restoring the approximate original contour of the slope. 

Companies affiliated with West Virginia Gov. Jim Justice had not properly reclaimed several Eastern Kentucky coal mines. This photo shows a highwall, or cliff, the state said was not reclaimed as required.

Photo: Kentucky Energy and Environment Cabinet 

The 2019 deal set deadlines for the Justice companies to finish reclamation. It also required the companies to put up a $2.9 million letter of credit the state could take if the Justices defaulted on the agreement, though they could get back that money if they maintained a sufficient number of workers in Kentucky.

In late September, the cabinet filed a motion arguing the Justices companies had missed deadlines in the deal. 

For instance, work at the Infinity mine was supposed to be done by June 30, 2020, but a cabinet official said in September that the companies hadn’t done any reclamation since the deal was filed in October 2019 and that more than a mile of highwall remained. 

The state moved to collect the $2.9 million included in the deal, plus interest that could drive the total significantly higher; revoke permits at five Justice mines; forfeit the reclamation money posted for them; require the companies to finish the work; and block Justice companies from getting new permits or revising current permits until the violations were fixed. 

 

Attorneys for the Justices said in response that the state’s request is “overly harsh,” unfair and not consistent with the law. 

The Justice companies said that the coronavirus pandemic that slammed the U.S. and world economies beginning in early 2020 had made it impractical, if not impossible, to meet all the deadlines under the 2019 deal. 

The price of steam coal, used in generating electricity, dropped from $70 to $30 a ton and the Justice companies lost one of their biggest markets in Asia in late 2019 because of the pandemic, meaning less money for reclamation, the companies said in a court document. 

“We just got blasted by the covid thing,” Justice said. 

Nationwide, coal employment bottomed out at 38,000 in April 2020, according to the U.S. Bureau of Labor Statistics. 

An attorney for the Justices contacted state regulators in 2020 about the downturn and proposed using the $2.9 million set aside as a potential penalty payment to instead finance reclamation work. 

The state turned down that idea, saying the $2.9 million was to cover civil penalties levied under a prior agreement — which the companies didn’t meet — and that the cabinet didn’t want to release it for work the companies were already required to do. 

The coal market has improved considerably this year, aided by the economic recovery and higher prices for natural gas, which competes with coal for power-plant customers. 

The upturn is the catalyst to start running coal at the four mines in Eastern Kentucky, Justice said Monday. 

Coal production in Eastern Kentucky was up nearly 46 percent in the April-to-June quarter compared to the same time a year earlier, and jobs had picked up by 3.57 percent. 

Justice said there are plans in place to finish the reclamation required under the 2019 deal and that now is a good time to do it because of the market improvement, but it will take a little more time. 

He said in a letter to a state official in late October that the companies could finish work at the Bevins Branch mine by April 1 and at the Infinity mine by April 20. 

“We’re not trying to get out of a liability at all,” Justice said. 

However, state attorneys said in a court document that the Justice companies missed a deadline to finish reclamation work at one mine in late 2019, before the pandemic hit the U.S. Citing the pandemic in that case is disingenuous because the company hadn’t done any work to reclaim the mine in four years, the cabinet said. 

The companies had a responsibility to finish the reclamation whatever the economic conditions, the cabinet argued. 

The state doesn’t benefit from the Justice companies’ practice of obtaining mine permits “then leaving violations unabated and the permits unreclaimed for years while they evade enforcement and ask repeatedly for extensions of time to do the reclamation work that the law requires,” state attorneys said.