Jim Justice company agrees to pay $900K fine, spend $5M on pollution control

West Virginia billionaire businessman Jim Justice announces that he is running for governor of West Virginia as a Democrat in 2016 in White Sulphur Springs , W.Va., Monday, May 11, 2015.
West Virginia billionaire businessman Jim Justice announces that he is running for governor of West Virginia as a Democrat in 2016 in White Sulphur Springs , W.Va., Monday, May 11, 2015. AP

A coal company owned by West Virginia billionaire Jim Justice has agreed to pay a $900,000 fine for environmental violations and improve pollution controls at mines in Kentucky and other Appalachian states at an estimated cost of $5 million.

The U.S Environmental Protection Agency announced the settlement Friday with Southern Coal Corporation and 26 affiliated mining companies.

In the complaint underlying the settlement, regulators alleged there were hundreds of environmental violations at Southern Coal’s mines and coal-processing plants in Kentucky, Tennessee, Virginia, Alabama and West Virginia over a five-year period.

Coal companies can get permits to let water run off mines and into streams, but there are limits on the level of pollutants the discharges can contain.

The alleged violations by Justice’s facilities included discharging water with levels of iron, manganese, aluminum, suspended solids and other pollutants that were too high; failing to sample for pollutants as required; and failing to provide reports and information to regulatory agencies.

“Discharging pollution from coal mining into waterways is a serious threat to clean water, and that’s why EPA stepped in on behalf of communities across Appalachia,” Cynthia Giles, a compliance officer at EPA, said in a news release.

Kentucky and many other states enforce federal clean water and mining rules, with federal oversight.

The Justice companies with pollution-discharge permits in Kentucky listed in the complaint are A&G Coal; Four Star Resources; Infinity Energy; Kentucky Fuel Corporation; Sequoia Energy; and Virginia Fuel.

In addition to improved pollution controls, the deal requires Southern Coal and affiliates to set up an environmental-management system approved by EPA; keep better track of violations, sampling data and compliance work; conduct regular inspections of discharge outlets and do necessary maintenance; and set up a public website with information on company permits, sampling data and violation information, according to a news release.

EPA estimated that work required by the deal will result in annual pollutant reductions of five million pounds.

The settlement also requires Southern Coal to set up a $4.5 million letter of credit and a trust to guarantee compliance if the companies don’t perform as required.

Of the $900,000 fine, EPA will receive half and Kentucky, Tennessee, Virignia and Alabama will divide half, with each state getting $112,500.

The complaint noted environmental violations in West Virginia, but the state did not join the settlement against Southern Coal, according to EPA.

The requirements to improve pollution controls will apply in West Virginia, EPA said.

The deal announced Friday is subject to public comment, which can be made at

The settlement is separate from one Justice reached with Kentucky in 2014 to clean up environmental problems. In that case, Justice admitted hundreds of violations at his company’s mines in Harlan, Knott, Pike, Leslie, Letcher, Breathitt, Magoffin and Floyd counties. Justice owed $4.49 million in fines for the violations, but the state agrered to cut that to $1.5 million as part of the settlement.

State regulators later complained that Justice was not making adequate progress on fixing the violations.

Justice has paid the $1.5 million fine, and is working with the state Energy and Environment Cabinet to finish the remaining reclamation obligations, cabinet spokesman John Mura said Friday.

Federal records list nearly all of Justice’s mines in Eastern Kentucky as non-producing, temporarily idled or abandoned.

Justice, who amassed a fortune in coal, timber and agriculture and was worth an estimated $1.6 billion in early 2015, is running for governor of West Virginia as a Democrat.