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Ky. mine owner struggling to open Blackjewel mine purchased in bankruptcy

The new owner of a Kentucky mine purchased in the bankruptcy reorganization of Blackjewel LLC is struggling to reopen due to disputes with state regulators, according to a letter posted in the U.S. Bankruptcy Court for the Southern District of West Virginia.

Blackjewel, doing business as Revelation Energy LLC, ceased operation of the D-2 Beechfork mine in Leslie County, Ky., in the summer of 2019, but it was not officially abandoned until Kentucky's Division of Mine Safety issued a forced abandonment on Nov. 27, 2019, state officials said. After buying the mine, new owner Black Mountain Resources LLC tried to relicense — a requirement to continue operations — using the name Raptor mine.

Black Mountain submitted an application to the Division of Mine Safety on Oct. 24, 2019, but it lacked required information such as a tax identification number and proof of workers' compensation insurance, the company said in a statement.

In a letter addressed to "Coal Miners" and published Jan. 7 on the bankruptcy court docket for Blackjewel's reorganization under the letterhead of Black Mountain Resources and Colony Bay Mining Co., company representative Jesse Sizemore explained that he spent the last three months trying to open the mine. He blamed the Kentucky Division of Mine Safety, or KDMS, for preventing the new owners from opening the operation.

"They are an unneeded agency that has far too much authority," Sizemore wrote in the letter. "MSHA keep miners safe in Tennessee. Why do we need a state agency such as KDMS that prevents us from putting you back to work in Kentucky?"

The Kentucky Division of Mine Safety said Jan. 14 that the agency continued to work with the company to complete and process its mine application. The week before, during a phone conversation with the Kentucky Energy and Environment Cabinet that included the state's mine safety division, officials said the company had indicated that it would suspend efforts to get a license and evaluate the potential of operating the mine.

In the letter, Sizemore also complained about not being allowed to enter the mine to retrieve equipment. He accused the mine safety officials of being a "nanny agency" that is obstructing the industry.

"Just think Mr. Coal Miner, how much better Christmas would have been at your house if we could have hired you at $30.00 or more an hour back in October," Sizemore wrote. "We have a few outside men working who had a great Christmas, but I wish I could have had all you men doing what you do best and paying top rate for it."

Officials said they have yet to receive a plan required to explore the mine, which would also need to be approved by the U.S. Mine Safety and Health Administration.

"Governor Beshear is committed to keeping miners working and has made the health and safety of all Kentuckians while doing so a key goal of his administration," Rebecca Goodman, the Energy and Environment Cabinet Secretary, said in a statement. "We are continuing to work closely with Black Mountain Resources to enable it to proceed with its plans as quickly and as safely as possible."

Bankruptcy court documents show that the company was authorized by the court to purchase six mines and related infrastructure in Kentucky from Blackjewel. Consideration for the deal included an immediate $50,000 payment to the seller and a credit bid of $134,900 pertaining to outstanding indebtedness associated with the mine. The purchase also included royalty payments to the seller over a period of three years.

Hundreds of Blackjewel coal miners were suddenly sent home from work in July 2019 when the company's original financing plan for its bankruptcy restructuring failed to materialize. The company subsequently sold off its assets in the eastern U.S. and the Powder River Basin to other coal companies through a bankruptcy auction sale.