Coal company that stiffed KY miners also cited for many environmental problems

Nov. 11--A bankrupt coal operation that shorted hundreds of miners on their pay also has racked up dozens of environmental violation notices in recent months and not taken action to clean up the problems, according to a court motion.

The violations cited at surface mines under permit to Revelation Energy and affiliated companies include landslides, discharges of contaminated water into streams, damage to areas adjacent to mines and failure to eliminate nine miles of highwalls -- cliffs created when companies blast and dig into hillsides to uncover coal.

Coal companies are supposed to eliminate those highwalls after extracting coal.

Even in bankruptcy, Revelation, sister company Blackjewel and their managers have an obligation to reclaim mined areas, treat polluted water and submit reports to state regulators, but "have elected not to do so," the Indemnity National Insurance Company said in a motion.

The company has a big stake in the issue because it provided $66.4 million in bonds to Revelation and affiliated companies to guarantee reclamation of the land they mined in Eastern Kentucky and southwestern Virginia. If the companies don't do the reclamation, state regulators could order the bonds to be forfeited.

In that case, the bonding company would have to either pay for the reclamation work or pay the bond amount on each mine site to the states, which would use the money to pay for the work.

Estimates indicate that the amount of the bond Revelation put up at many sites is "grossly insufficient" to fully pay for the required reclamation and water treatment, the insurance company said.

The company's motion by attorneys Daniel I. Waxman in Lexington and Stephen L. Thompson in Charleston, W.Va., seeks an order for Revelation and sister companies to pay the insurance company anything it has to spend on the their environmental obligations.

Other companies have taken over some Revelation or Blackjewel permits and assumed reclamation obligations, and more permits could be transferred.

If all the permits currently in the transfer process go through, the companies in bankruptcy with Revelation would hold 59 permits, most of them in Kentucky.

Revelation, Blackjewel and several affiliated companies are named in the motion, which highlights another piece of the fallout in Central Appalachia from their bankruptcy.

Revelation and Blackjewel filed for bankruptcy on July 1 and shut down mines employing a total of 1,100 people in Kentucky, Virginia and West Virginia.

Most of them were employees of Blackjewel, which mined coal while Revelation focused on reclamation work, according to a court document.

The final checks Blackjewel gave miners bounced. Banks deducted the amounts they had credited to miners' accounts, leaving hundreds overdrawn and scrambling to pay bills. Miners blocked a coal train in Harlan County for two months out of frustration.

Federal and state labor regulators ultimately helped work out a deal for Blackjewel to pay the miners.

An attorney for Revelation did not respond to a request for comment Friday.

Blackjewel and Revelation have faced tough times, Indemnity National noted, but that does not "justify a complete abrogation" of their duty to comply with environmental laws.

Revelation Energy had a high number of violation notices even before the bankruptcy.

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