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Issue link: https://coal.epubxp.com/i/105148
news continued dants Buckingham Coal and the Ohio Department of Natural Resources is scheduled for trial this summer. The DoJ brought the suit in May 2011 in U.S. District Court for the Southern District of Ohio, seeking unspecified damages against Buckingham for the company's tunneling beneath 2,593-acre Burr Oak State Park in Athens and Morgan counties to connect its No. 7 underground steam coal mine with an untapped reserve it controls east of the park. In 2010, ODNR leased Buckingham a 41.4-acre tract, known as the "corridor," containing coal reserves under the park. The Ohio General Assembly subsequently voted to authorize the lease. DoJ, which filed suit on behalf of the U.S. Army Corps of Engineers, claims the state had no legal authority to lease the coal rights to Buckingham under a 1948 agreement signed before the park's lake and dam were built. Plaintiffs contend the mining could cause subsidence damage to both the lake and dam. Defendants disagree. Last fall, Buckingham filed a counterclaim against the federal government, seeking to recoup damages "not in excess of the damages sought by the United States." The parties have attempted, without success so far, to settle the dispute out of court. So, in December, U.S. District Judge James Graham scheduled a June 22 trial in the federal court in Columbus. The jury trial could last two weeks. Essar Still Battling with the EPA Attorneys for the federal government had until mid-January to amend a complaint alleging Clean Water Act violations by subsidiaries of India's Essar Group at mountaintop removal mines in eastern Kentucky or risk dismissal of a lawsuit filed last June. The Environmental Protection Agency sued the companies—Frasure Creek Mining LLC, Essar Minerals, Trinity Corp., Trinity Coal Partners, Bear Fork Resources LLC, Falcon Resources LLC and Prater Branch Resources LLC—in U.S. District Court for the Eastern District of Kentucky. The companies were accused of illegally dumping pollutants from mining sites in Floyd, Magoffin and Pike counties into five tributaries of the Levisa Fork River. In August, the companies formally answered the government's complaint, insisting they did not pollute the waterways in question. Subsequently, they asked U.S. District Judge Amul Thapar to dismiss the suit, asserting the allegations against individual defendants lacked specificity. As a result, attorneys for the defendants said they were having problems pursuing "discovery" in the case. Discovery is a pre-trial phase in a lawsuit in which each party can obtain evidence from the opposing party. The judge, on December 19, denied the dismissal request, but Thapar also gave government attorneys until January 11, 2013, to amend the complaint. "If the United States does not file an amended complaint, the clerk shall reinstate the defendants' UK Coal Restructures BY SIMON WALKER In December, the UK's largest coal producer finally completed an eight-month restructuring exercise that has involved splitting its mining and property assets into separate entities. Faced with continuing operating losses, $220 million in debt and a $680 million deficit in its pension funds, UK Coal risked breaching covenants had it not done so, with its mining operations liable to run out of cash early in 2013. Under the new structure, UK Coal Mine Holdings becomes a wholly-owned subsidiary of a new parent company, Coalfield Resources plc, with the property portfolio it acquired in the 1990s during the privatization of former state-owned British Coal being placed in Harworth Estates Property Group. Coalfield Resources retains a 90% economic interest in the mining division, although voting control has been passed to a newly established employee benefit trust. The company's pension funds now have a 75.1% interest in Harworth Estates in return for a $50 million cash injection to the property business, with all surplus cash flow from the mines to be used to fund the pension deficit for the foreseeable future. During 2011, UK Coal produced 7.5 million mt of mainly power-station fuel, of which 5.7 million mt came from its three remaining underground mines. Although the company reported net profits of $87 million on revenues of $770 million for the year, its long-term performance has been weak since the late 1990s. It reported a $34 million loss for the first half of 2012, and warned that its deep mine with the longest potential resource life, Daw Mill, will close in 2014 (or before) unless its performance improves and costs are cut. 6 www.coalage.com A shearer operator cuts coal at Daw Mill. (Photo courtesy of Eickhoff) If nothing else, the restructuring buys Coalfield Resources time. However, the company is saddled with high fixed costs at its underground mines, problems with winning permits for new surface operations, and a coal market in which imports compete strongly for generators' business. The question remains, of course, whether it will be able to provide a 'soft landing' for its remaining 2,500 workforce in the longer term as reserves run out, or whether imports—including increasing tonnages from U.S. suppliers faced with their own shale-gas competition issues—will undermine the last pillar of Britain's coal industry. January 2013