Bid to buy Eastern Kentucky mines could help over 250 employees avoid lay off

A mining company that runs multiple mines in Harlan and Letcher counties in recent weeks warned 258 employees of a possible mass lay off.

INMET Mining, the company which owned the mines, “recently and unexpectedly was unable to obtain further financing necessary to continue ordinary operations,” the company wrote in a letter to the state that warned of the layoffs.

However, INMET has received a bid from another company to buy the mines and according to Jeff Strobel, INMET’s chief restructuring officer, no employees have been laid off and operations continue. The company is in the midst of Chapter 11 bankruptcy proceedings and issued a federally required WARN notice to warn employees of the lay off as part of those procedures.

“INMET continues to work to avoid layoffs and is hopeful that in the near future it may be able to extend the date of previously issued WARN notices,” Strobel told the Herald-Leader in an email.

In the first three months of this year, 596 people were employed at mines in Harlan and Letcher counties, state coal mining data shows. This year, 129 different mines were licensed statewide and they collectively employed over 4,400 miners during that same time period.

The mines were scheduled to be idled May 31 and the employees would be laid off over the course of roughly two weeks in June, the letter said. Dan Mosley, the judge-executive in Harlan County, told the Herald-Leader in an email that he believes “that this will be more of a transition than a layoff.”

In a different statement to WYMT, Mosley said much the same but added that if INMET “is not going to continue operating in Harlan County, I’m confident that some company will acquire these assets and keep people working.”

That may end up being the case. According to filings in federal bankruptcy court, INMET’s Kentucky mine sites are up for auction. The company also owns mining property in Virginia, which also is for sale.

A company called Black Mountain Marketing and Sales has submitted a “stalking horse bid” to buy the mines, Strobel said. The bid would allow for Black Mountain to offer jobs to INMET employees.

INMET filed for bankruptcy in April and is working to sell its mines as part of the process. According to court files, the company has five mines in Kentucky. Three — the Darby, Tyree and Panther mines — were active. A fourth mine, called Orchard, just began operations in April while the last mine was expected to begin operations in 2024.

Publicly, INMET had a rocky 2022. In March, the Darby mine in Harlan County was the site of one of Kentucky’s two mine-related fatalities last year. James Brown, a 33-year-old miner from Lynch, died when the mine’s roof collapsed on him. A subsequent federal investigation blamed the accident on safety lapses.

Weeks later, Hunter Hobson, INMET’s CEO, was indicted on federal money laundering, wire fraud and bribery charges. Investigators accused Hobson of bribing officials of an Egyptian coal company to obtain coal contracts for a Pennsylvania coal company where Hobson was the vice president. Hobson pleaded not guilty.

Should INMET’s mines sell, it wouldn’t be the first time those assets changed hands. INMET acquired the mines from Blackjewel after the mining company went bankrupt in 2019. Miners, who had not been paid for weeks of work, gained national attention when they blocked a coal train leaving one of the Blackjewel mines in Harlan County for two months in protest.

A dispute between INMET and the trust in charge of liquidating Blackjewel may have an effect on the sale. According to INMET’s bankruptcy filing, the company owes over $15 million to the Blackjewel Trust.

When INMET bought the mines, they agreed to pay Blackjewel over time through annual “royalty” payments. In a spinoff from the bankruptcy proceedings, INMET opted to sue the Blackjewel Trust in May, arguing that those payments don’t “run with the land” and shouldn’t be passed on to a future owner.

In court filings, the Blackjewel Trust disputed the INMET lawsuit and further alleged that INMET breached their prior agreements by not paying millions in royalty payments to the trust.

Editor’s note: This story has been updated with comment and more information from INMET about the layoff notice and possible mine sales.