A proposed battery manufacturing plant in Pikeville will be delayed by at least a year after the company discovered problems with the planned construction site that could cost $30 million to fix, officials said Thursday.
“The project can’t stomach $30 million in soil work,” Enerblu President and CEO Daniel Elliott said at a Southeast Kentucky Chamber of Commerce luncheon Thursday.
The company is reviewing its options, but has not found a way to construct its facility in Pikeville’s industrial park, a reclaimed coal mine near the city, Elliott said.
“We’re trying like hell,” he said. “It’s a lot harder than we thought.”
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In late 2017, Enerblu announced it would employ 875 people at its proposed $372 million battery manufacturing plant. Officials then estimated the plant would open in 2020, but Elliott said Thursday that the company now hopes to open the plant in 2021 given the delays at the site.
He said Enerblu could employ about 1,000 people in Pikeville, but said that figure could climb as high as 1,500.
The company relocated its headquarters and staff from Riverside, Calif., to Lexington last year.
In addition to delays in Pikeville, the company has yet to acquire permits for a smaller warehouse and research facility planned in Lexington.
The company had hoped to acquire the necessary permits in November 2018 but faced delays, and is now further delayed due to the government shutdown, Elliott said.
“How far we’re pushed out, I don’t know yet,” he said.
The proposed battery factory isn’t the first project to run into extra costs to build on a reclaimed surface mine.
Federal officials said in April 2000 that the cost to prepare a former surface mine in Martin County for construction of a federal prison would be $40 million, making it the most expensive site ever for a U.S. prison.
Contractors reportedly moved more than 3 million cubic yards of dirt and rock and drilled hundreds of holes to stabilize building sites. Even with that, the Herald-Leader reported in 2002 that a 100-foot tall guard tower at the prison tilted a few inches and another building had sunk slightly.
In another case, the newspaper reported a company called Trus Joist McMillan spent $1 million to dig down far enough to get firm footing for its wood-products factory in an industrial park created on a former surface mine in Perry County.
The proposed high-tech greenhouse, AppHarvest, also abandoned its plans to build on Pikeville’s industrial park after reportedly running into problems building on the site.
In August of last year, Gov. Matt Bevin and U.S. Rep. Hal Rogers announced a $6 million grant from the Kentucky Energy and Environment Cabinet’s Division of Abandoned Mine Lands to help Enerblu get up and running.
The company’s decision to locate in Pikeville brought high praise and hopes from elected officials working to help the region bounce back from a sharp decline in coal jobs.
Ray Jones, who was then the state Senate minority floorleader and is now the judge-executive of Pike County, called Enerblu’s commitment a “game-changer not only for Pikeville and Pike County, but for the entire region.”
Bevin called the project “transformative,” and Rogers said “we’ve dreamed about this day.”
Over the past eight years, Eastern Kentucky has suffered from a dramatic decline in coal production and employment, which had sustained its economy for decades.
In 2012, there were more than 11,000 coal jobs in Eastern Kentucky. In the third quarter of 2018, there were about 3,800.
Elliott said his company still plans to move forward and find solutions for the Pikeville project.
Phil Elswick, Pikeville’s city manager, said the city will “work through any development issues as they come up.”