Blackjewel has environmental debts, bankruptcy court told

KFTC and allies have asked a federal bankruptcy judge to consider the environmental liabilities created by Blackjewel LLC and its affiliate mining companies in settling the company’s bankruptcy case.

Blackjewel – the company that gained notoriety last year when it shut down while owing its workers unpaid wages – has unreclaimed mines throughout eastern Kentucky, as well as in Virginia and West Virginia.

In filings earlier this year, Blackjewel assured the court that the majority of its permits and reclamation obligations had been assumed by other operations, which would be responsible for maintaining and reclaiming the sites.

However, there has been no activity to transfer 149 of the 213 permits the company holds in Kentucky, research has revealed. In the meantime, environmental violations continue to grow at many of the sites.

“We’re alarmed by the fact that so few permit transfers have even been initiated, let alone completed. We’re also alarmed by high, and increasing, number of permit violations at the non-transferred permits,” stated the letter written by Mary Cromer with the Appalachian Citizens’ Law Center, based in Whitesburg.

The June 17 letter further stated: “We ask that the Court … require the parties to address whether and how … these mines will be brought into compliance and that reclamation obligations will be achieved. In addition, we ask this Court not allow Blackjewel to abandon any of its eastern mining permits until all ongoing environmental violations on those sites are abated.”

The number of environmental and safety violations has more than doubled over the past year at the sites still held by Blackjewel.

The letter reflects the position of the Beshear administration.

“Filings in federal bankruptcy court show that Blackjewel’s violations alone account for 30 percent of all outstanding non-compliance notices sent by the Kentucky Department of Natural Resources as of Dec. 31. The state warned the court that the company has made little or no progress in addressing those violations,” reported Bill Estep in the Lexington Herald-Leader.

“In addition, bonds posted by the company to cover reclamation costs may be woefully inadequate. Kentucky has had longstanding problems with coal companies posting inadequate bonds to cover reclamation.”

Because of the complexity of Blackjewel’s holdings, ownership history and disputed assets, the case is likely to grind on for months or years.

The allies’ letter represents an effort to get the bankruptcy court to recognize and consider Blackjewel’s environmental and community liabilities with equal weight with liabilities claimed by other creditors. This is usually not the case in bankruptcy proceedings.

“We believe that the information presented in this letter is relevant to the Court’s consideration,” the letter stated. “The information presented in this letter goes to central questions about Blackjewel’s ability to comply with both bankruptcy and non-bankruptcy law.

“We are grateful for the opportunity to participate in these proceedings to give voice to the concerns of our members who live near these mines, and whose communities will bear the burden of the non-reclamation of these disturbed mine sites.”

The letter was written on behalf of the Citizens Coal Council, Appalachian Voices, Appalachian Citizens’ Law Center, Kentucky Resources Council, the Sierra Club, the Powder River Basin Resource Council, Kanawha Forest Coalition and KFTC.

Blackjewel and its affiliates have mines in Bell, Breathitt, Floyd, Harlan, Johnson, Knott, Letcher, Martin, McCreary, Perry and Pike counties in Kentucky, as well as Virginia and West Virginia, and in the western U.S.