Neither unemployed nor allowed to work: Virginia’s Blackjewel miners look for relief

By: - July 8, 2019 11:07 pm

The Osaka mine near Appalachia, Va., owned by Blackjewel, LLC, which filed for bankrupty July 1. (Sarah Vogelsong/Virginia Mercury)

WISE — One week after the nation’s sixth-largest coal producer filed for bankruptcy, the almost 500 Virginia miners sent home from work and deprived of their last paychecks still have no answers — and no relief.

Information comes only through social media, say miners from Blackjewel, LLC’s 10 Virginia facilities. Their last paychecks, issued June 28, were abruptly clawed back after Blackjewel filed for Chapter 11 bankruptcy July 1, leaving many with no money, piles of overdraft charges and the pending cancellation of their health insurance.

At the same time, the Blackjewel miners have found themselves in a position they say they’ve never encountered: the mines are closed, but the miners haven’t been laid off. Several workers at the D-17 mine in Jewell Ridge said that a superintendent told them that “maybe in a week” work might resume. But in the meantime, since they technically are still employed, they can’t file for unemployment.

“I don’t know how I’m going to feed my family,” said Josiah Williamson, 33. Williamson, who has worked at D-17 for about a year but has been in the mining business for a decade, has an 8-year-old daughter and said that his bank told him that he needs to come up with $2,100 for his paycheck that bounced by Friday.

He doesn’t have it. And right now, he doesn’t have any way of getting it.

“Everyone we know is broke right now,” said Colten Allison, 30, a section foreman at D-17.

In other states, Blackjewel miners have gotten some relief. The company’s roughly 600 Wyoming workers were paid through June 29 after former Blackjewel CEO Jeffrey Hoops, who has since been forced to resign, flew more than 700 cashier’s checks to the state to cover their payroll.

The eastern division — which includes 1,100 workers in Virginia, Kentucky and West Virginia — was not so lucky. Payroll checks for these employees are still outstanding, Blackjewel admitted in a July 5 employee update.

“Payment of these checks is dependent on the company’s ability to obtain additional financing that will allow normal operations to resume,” the memo declared. Until then, “those employees who have not yet resumed work will need to wait to be recalled to work for their checks to be paid.”

With no resolution in sight, Kentucky has taken action to offer its miners relief.  On July 5, Attorney General Andy Beshear announced he was opening an investigation into what he called “numerous troubling complaints related to the Blackjewel mining company.” In the meantime, Harlan County Judge-Executive Dan Mosley on July 8 began providing Kentucky Blackjewel miners a letter on his official letterhead that outlines the situation and asks creditors to extend debt payments and waive any penalties or fees associated with late payments.

“It doesn’t mean they will but it will provide you a tool to validate to creditors what is going on right now in your life,” Mosley stated in a Facebook post.

But while Virginia miners comprise more than 40 percent of the eastern division — the state’s Department of Mines, Minerals and Energy recorded 484 Blackjewel employees in 2018 — state officials have remained largely silent.

In response to inquiries, Michael Kelly, communications director for Virginia Attorney General Mark Herring, said the office was “aware of the reports” and was monitoring the situation “for potential impact on Virginia and Virginia miners.”

Del. Terry Kilgore, R-Scott, whose district includes some of the affected miners, in a Facebook post recommended that Virginia workers file a complaint with the state Department of Labor and Industry and said that the Virginia Employment Commission was convening a rapid-response team to address the issue.

Kilgore’s office did not respond to multiple requests for comment.

It’s not unusual for this remote portion of southwestern Virginia, a six-hour drive from Richmond, to feel isolated from the state capital. Locals in Big Stone Gap in Wise County proudly tell visitors to the town that they are closer to eight other states’ capitals than Virginia’s. And miners, said Rufus “Jolo” Jewell, 48, an electrician and belt examiner at D-17 and a 22-year veteran of the industry, are accustomed to weathering the boom and bust typical of the coal business.

But the Blackjewel case, the D-17 miners agreed, is different. In most cases of Chapter 11 bankruptcy, under which a company reorganizes and restructures its debt while continuing to operate, the workers “keep on trucking,” said Allison.

Blackjewel hasn’t. On July 3, a judge in the federal Bankruptcy Court for the Southern District of West Virginia denied the company’s petition for a $20 million financing agreement, later agreeing to a reduced $5 million loan that would help keep Blackjewel temporarily afloat. One condition of that loan was that Hoops step down.

As the southwestern Virginia miners wait to see whether the company will survive or whether its mines will close, stilled until yet another owner comes along, most are looking for a new job to avoid foreclosure and repossession.

Some mines in the region are still hiring, largely thanks to a surge in demand for metallurgical coal, which is used in steelmaking.

But there aren’t anywhere close to 484 open positions in a state where coal employment has plummeted from more than 11,000 three decades ago to just shy of 3,000 in 2018. Despite the metallurgical coal spike, market forces that encourage the development of natural gas and renewables as energy sources while also increasing regulatory burdens on increasingly mechanized coal mines have stacked the deck against another long-lasting resurgence of the industry.

Those miners who can’t find jobs, said Jewell, are likely to leave for neighboring West Virginia and Kentucky. He wouldn’t blame them.

“Somebody,” he said, “should have stepped up for us.”

CORRECTION: Blackjewel is the nation’s sixth-largest coal producer, according to federal data from 2017. The company’s ranking among coal producers was incorrect in an earlier version of this article.

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Sarah Vogelsong
Sarah Vogelsong

Sarah is the Mercury's environment and energy reporter, covering everything from utility regulation to sea level rise. Originally from McLean, she has spent over a decade in journalism and academic publishing. She previously worked as a staff reporter for Chesapeake Bay Journal, the Progress-Index and the Caroline Progress, and her work has been twice honored by the Virginia Press Association as "Best in Show" for online writing. She was chosen for the 2020 cohort of the Columbia Energy Journalism Institute and is a graduate of the College of William and Mary. Contact her at [email protected]