Coal Age

SEP 2013

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news Essar Decides Not to Sell Trinity Complexes India's Essar Group was working with major creditors this summer on a financial restructuring plan for its Trinity Coal Corp. subsidiary after deciding not to sell Trinity's six coal mining complexes in West Virginia and eastern Kentucky. Trinity and several affiliates were forced into involuntary bankruptcy last February by major creditors, including units of Credit Agricole SA, ING Groep NV and Natixis, who claimed they were owed more than $104 million. Essar acquired Trinity, a central Appalachian coal producer, for $600 million in 2010. Trinity's holdings are located in Breathitt, Floyd, Knott, Magoffin and Perry counties in eastern Kentucky and Boone, Fayette, Mingo, McDowell and Wyoming counties in West Virginia. For several months, Trinity was moving toward a sale of some or all of its mining assets: Deep Water Resources, North Springs Resources and Falcon Resources in West Virginia and Prater Branch Resources, Little Elk Mining and Lavisa Fork in eastern Kentucky. But this summer, Trinity asked the U.S. Bankruptcy Court for the Eastern District of Kentucky to delay a planned court-sanctioned auction of the Trinity assets. Then, Essar unveiled a plan to retain the assets and seek to reorganize Trinity's debts. Although a Trinity attorney declined to comment on the reason for Essar's change of heart, other lawyers involved in the bankruptcy case suggested Essar concluded the assets probably would not fetch a desired high price given the soft coal market, particularly for Central Appalachia coal. Essar, the attorneys said, wants to buy back Trinity's debt from the creditors. Of the six mining complexes, only the Deep Water and related metallurgical operations in Fayette County, W. Va., is currently producing coal. The others have been idled for some time. ± B R E A K I N G On Friday evening, Aug. 16, Patriot Coal employees represented by the United Mine Workers of America (UMWA) ratified 5-year labor agreements. These agreements were reached between Patriot's signatory subsidiaries and the UMWA, as previously announced on August 12. "Ratification of these agreements provides labor stability and ensures cost savings essential to Patriot's plan of reorganization," said Patriot President and CEO Ben Hatfield. "These agreements should set Patriot on a path to emerge from bankruptcy by the end of 2013." A motion seeking authorization to enter into these agreements was filed with the bankruptcy court in St. Louis. Judge Kathy Surratt-States granted Patriot's request to enact the collective bargaining deal. "Ratification of these agreements provides labor stability and ensures cost savings essential to Patriot's plan of reorganization," said Hatfield. "This is a bright ray of good news in what has been a long, dreary period for the retirees, their dependents and widows who have been desperately worried about what's going to happen to their health care," UMWA President Cecil Roberts said. In Judge Surratt-States ruling, she allowed Patriot to abandon its current labor and retiree obligations and modify them, and while doing so also voided Peabody's commitment to fund benefits of some 3,100 retirees from the Heritage unit. She stated that since the collective bargaining agreements had been rejected, Heritage was no longer obligated to provide the benefits, and therefore, Peabody was not required to fund them. However, on August 21, an appellate panel disagreed and reversed her ruling. The panel said, "Whether Heritage's obliga- N E W S Court Rules in Favor of MSHA on Mach Mining's Ventilation Plan The U.S. Court of Appeals for the Seventh Circuit ruled in favor of the Mine Safety and Health Administration (MSHA) on an appeal by Mach Mining related to its ventilation plan. The court held that an MSHA district manager has broad discretion to disapprove a mine operator's proposed ventilation plan for an underground coal mine, and may do so as long as the decision is not arbitrary and capricious. According to the agency, the court rejected the contention that an operator may ask the Federal Mine Safety and Health Review Commission to substitute its judgment for MSHA's in approving or disapproving a ventilation plan MSHA determines is inadequate to address health and safety requirements and the particular conditions of the mine. "Both the commission and the Court of Appeals recognized that it is appropriate to leave determinations on the sufficiency of highly technical mine plans to MSHA," said Joe Main, assistant secretary of labor for mine safety and health. "We believe the court made the appropriate decision in this case." 4 www.coalage.com UMWA Ratifies Patriot Agreement; Appeals Court Rules Peabody Energy Still Accountable At issue in the case was a ventilation plan proposed by Mach Mining LLC for its No. 1 Mine, an underground coal mine in Williamson County, Ill. Despite "extended good-faith discussions by MSHA," the parties were not able to reach agreement on the contents of the plan, according to the agency. Following a hearing, an administrative law judge ruled that: the district manager had negotiated in good faith, the district manager's decision to withhold approval of the plan was not arbitrary and capricious, he had not abused his discretion in determining that the plan was unsuitable, and the changes to the plan requested by the district manager were suitable. After Mach Mining appealed the administrative law judge's ruling, a 3-2 majority of the commission affirmed. Mach Mining subsequently filed a petition to the Court of Appeals for review, and the Court of Appeals denied Mach Mining's petition and affirmed the commission's decision. September 2013

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