KY coal company asks lawmakers to force regulators to okay mining despite violations
The head of an Eastern Kentucky coal company asked state legislators to push regulators to let a contractor operate one of its mines even though the company has outstanding violations.
However, a top state regulator said it’s unlikely federal authorities would okay the deal the company wants.
The issue involves American Resources Corporation, which is headquartered in Indiana but has coal properties in Eastern Kentucky. Those include mines formerly controlled by Cambrian Coal, once a significant producer in Central Appalachia before filing for bankruptcy in June 2019.
American Resources, also known as ARC, bought permits for several Cambrian mines.
However, ARC has unresolved environmental and reclamation violations at mines in Kentucky and Indiana, and so is blocked under federal law from receiving permits, according to records in the bankruptcy case.
Mark Jensen, chief executive officer of American Resources, said his company has a deal to sell coal from its E4-2 underground mine in Perry County to a Canadian steelmaker, and has a contractor ready to mine the coal.
However, the state Department for Natural Resources (DNR) has not allowed the contractor to mine because of ARC’s outstanding violations, according to Jensen and a lawsuit in Perry County.
Jensen came to the Senate Natural Resources and Energy Committee Wednesday to try to force regulators’ hand.
The chairman, Republican Brandon Smith of Perry County, said company representatives had approached him about the impasse last week.
Jensen told committee members that American Resources has corrected violations it inherited in buying coal properties in bankruptcies and completed reclamation work on thousands of acres in Eastern Kentucky in recent years.
The deal with the steelmaker would mean 176 jobs in a place that desperately needs them, he said.
“Our companies are laser-focused on creating jobs in Eastern Kentucky,” Jensen told committee members.
If the mine doesn’t start producing coal by next week, American Resources will lose the contract and won’t be able to hire miners, Jensen said.
That would also jeopardize other plans the company has for expansion, Jensen said.
When Smith asked Jensen how the committee could help, Jensen replied “get DNR” to let the contractor go to work.
It was an unusually public plea for lawmakers to intercede with a state agency on a regulatory matter.
“Let my independent operator operate on that permit today,” Jensen said.
The contractor, Hazard Coal Sales, does not have any outstanding violations that would prevent it from getting a permit, Jensen said.
Gordon Slone, commissioner of the Department for Natural Resources, said under the law, American Resources can’t operate the mine or assign a contractor the right to run it because of the outstanding violations.
Even if the state agreed to let American Resources assign the permit to a contractor, the U.S. Office of Surface Mining Reclamation and Enforcement would likely shut down the mine and issue a notice against Kentucky, Slone said.
The state, which has worked with American Resources since October 2019 on the company’s unresolved violations, is not blocking the company from putting miners to work, Slone said.
“Rather, ARC’s failure to comply with mining laws is the reason miners aren’t working there today,” Slone told the committee.
The state “obviously wants miners to be working,” but that has to be done within the law, said Slone, a former miner himself.
The committee approved Smith’s motion to have the Department for Natural Resources report back in 10 days on what it had done “to try to do everything it can to prevent us from losing these jobs.”
This story was originally published February 24, 2021 at 4:18 PM.
