Four coal mines in Pike County and Perry County, all owned by American Resources Corporation, have been ordered to close after the Kentucky Division of Mine Safety removed the company’s mining permits, citing permit violations.
The Kentucky Division of Mine Safety issued closure orders on Jan. 14 for Carnegie Mine and Mine 15 in Pike County, licensed by McCoy Elkhorn Coal, formerly a company under the James River Coal Company, and for E4-1 and E4-2 in Perry County, licensed by Management Consultant Services under American Resources.
American Resources purchased McCoy Elkhorn Coal in a 363 bankruptcy sale from James River Coal Company in 2016, and Mine 15, located in Meta, restarted its coal production about seven months after the purchase.
Carnegie Mine, E4-1 and E4-2 received closure orders by the Kentucky Division of Mine Safety due to a “failure to have workers’ compensation coverage.” Mine 15 was ordered to close due to a “failure to pay all employees,” and no work can be done at the mine except for mine examinations and the maintenance of the mine and preparation plant, according to the Kentucky Energy and Environment Cabinet, which oversees the Kentucky Division of Mine Safety.
All established standards of operation must be met before mining permits can be issued in Kentucky, according to the Kentucky Energy and Environment Cabinet.
The News-Express could not reach American Resources for comment regarding the closures. All calls made to the company’s corporate office went unanswered as of presstime.
American Resources operates four mining complexes located primarily within Pike, Knott and Letcher counties in Kentucky and Wyoming County in West Virginia, with additional mining operations in Sullivan and Greene counties in Indiana, according to its official website.
The closure of the two Pike County mines comes after several Pikeville miners blocked coal from being moved at the Blackburn Bottom railroad intersection near Kimper Jan. 13-15, for not being paid for three weeks by their employer, Quest Energy, Inc., a subsidiary of American Resources Corporation. The miners confirmed they received their three weeks in backpay by Jan. 15.
The closure of the two Perry County mines comes after complaints have been made against American Resources in the county for not paying its employees.
In September last year, after Cambrian Holding Company, Inc. filed for Chapter 11 bankruptcy protection in June, American Resources closed on the purchase of Perry County Coal, or Perry County Resources, leading to a majority of employees being laid off.
As of Jan. 9 this year, many of those employees have also made complaints to the Perry County Judge-Executive Scott Alexander about not receiving their paychecks. Alexander told the Hazard Herald that his office has started seeking help for the employees from the U.S. Department of Labor to receive their wages.
The Hazard Herald was unable to reach American Resources for a statement, regarding the alleged unpaid wages.
There has also been a lawsuit filed against American Resources Corporation and Perry County Resources LLC by the Hazard Coal Corporation that moved up from the Perry County Circuit Court and into federal court, the U.S. Eastern District of Kentucky, on Jan. 17.
According to court documents, Hazard Coal has accused American Resources and Perry County Resources of failing to obtain permits to operate the mining properties, of failing to pay its required annual minimum royalty payment and of not paying the electric company, which, the company alleges, caused the power to go out in the mine and led to the mine flooding.
In a statement provided by American Resources to the News-Express, the parent company claimed that the continuation of Hazard Coal’s lawsuit caused the company to be unable to pay its employees at Mine 15. It also denied claims made by the plaintiff, and alleged that the lawsuit is “frivolous.”
“American Resources continued to spend money at Perry County maintaining the operations, waiting for the court to dismiss the Hazard Coal Corp. case,” the company said in its statement to the News-Express. “With this added extra expense, it strained all of American Resources Corporation’s operations, including McCoy Elkhorn.”