Bill Smith, who owns High Ridge Mining, began leasing coal reserves in the traditional coal-producing eastern Kentucky county years ago and now controls some 100 million tons in the Alma, Pond Creek and Cedar Grove seams.
Altogether, the mines are projected to produce 1 million tons annually.
Smith said he has a buyer, who has not been publicly identified, along with the needed permits.
Applications were being accepted in the spring for the roughly 250 jobs created once operation begins—an opportune time for eastern Kentucky, a region that has lost in excess of 4,000 mining jobs and experienced a 40% decline in coal production over the past 18 months.
“This deal goes to China and other places,” said long-time Pike County Judge Executive Wayne T. Rutherford, who said he has known Smith for years. “This is where our market is going to be. We’re only going to have deep mines here in the future and it’s going to be exported.”
Rutherford, a fierce coal industry defender, said the current market downturn is not the first to hit the region. When coal mining recovers in eastern Kentucky, “the ones who start building it back up are the local” producers, he said, “not the national companies.”
There are signs of a modest coal recovery in Kentucky in 2013. On the heels of a sharp decline in production and mining jobs in 2012, preliminary data released by the Kentucky Department of Natural Resources in May indicated the state’s total coal output increased by a marginal 0.4% during the first three months of the year, to a rate of 20.6 million tons per quarter. The growth occurred in the high-sulfur western Kentucky coalfield, where production climbed by 2.3% in Q1 2013. Eastern Kentucky production decreased by 1.5% in Q1 and fell by 26% over the past 18 months and 38% since 2000.
Kentucky coal mine employment continued to dip in the first quarter, by 990 jobs, a slower decline than in 2012. Bill Bissett, president of the Kentucky Coal Association, said he remains concerned about the continued drop in mining jobs. “We would say we’re down but not out in the east,” he said. Pointing to an increase in coal exports in the region, he “cautiously” predicted job losses and production at least have flattened out in eastern Kentucky.