The Fayette Tribune, Oak Hill, W.Va.

Local News

February 23, 2013

Creditors attempting to force Frasure Creek Mining into bankruptcy

PAGE — Adding to a heap of troubles for Frasure Creek Mining, the company’s creditors are now trying to force it into bankruptcy so they can get paid.

On Feb. 14, Austin Powder Company of Cleveland, Ohio, Charleston-based Cecil I. Walker Machinery, and Whayne Supply Company in Louisville, Ky., filed an involuntary petition in federal bankruptcy court in the eastern district of Kentucky.

They are claiming that Frasure Creek — owned by India-based Essar Minerals — owes them a total of $20.1 million for goods, services, and parts they provided, according to court documents.

Frasure Creek holds four surface mine permits and three deep mine permits in Fayette County, two surface permits in Boone County, three surface permits and one underground in Mingo County, and one deep mine permit in McDowell County.

Approximately 100 Fayette countians launched an unsuccessful permit appeal of one of Frasure’s operations before the Surface Mine Board in 2011, claiming the area’s water source could be threatened.

Local citizens have lodged individual complaints against the company with the West Virginia Department of Environmental Protection over blasts and other property damage.

In February of last year, the Ohio Valley Environmental Coalition threatened to sue the company over alleged selenium discharges at its Open Fork Surface Mine complex. They never filed but continue to monitor for any spikes in selenium or aluminum, according to the group's attorney, Mike Becher.

That spring, Frasure laid off significant numbers of miners in Fayette County.

Then in August, the company confirmed it had temporarily shut down its Fayette County operations but planned to reopen them the following month.

Soon after, the company auctioned off more than 180 pieces of mining and earth-moving equipment, primarily from its Kentucky mines.

Despite these problems, officials from Trinity Coal, Frasure Creek’s parent companies, told The Register-Herald last August that bankruptcy was not a part of their plans at that time.

Amid litigation over thousands of water quality violations in Ky., Frasure confirmed last October that it had stopped mining in that state. The company told the court that its precarious financial situation made it impossible to pay the amount demanded by environmental groups for violations and penalties.

Frasure was also a defendant in a suit brought by former employees who claim the company told them they were not in financial trouble and then turned around and fired them without giving proper notice under federal law.

Frasure Creek must file a response to the involuntary bankruptcy petition within 21 days of a summons issued by the court on Feb. 15.

Trinity Coal could not be reached for comment.

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