The Register-Herald, Beckley, West Virginia

August 17, 2012

Owner of TV's 'Coal' mine sued for unpaid royalties

By Vicki Smith
The Associated Press

— The operator of the southern West Virginia mine featured in the Spike TV reality show “Coal” is being sued in federal court for failing to pay two companies the production royalties they say they’re owed.

Encoal Energy and Gopher Land Services sued Canadian-owned Cobalt Coal Co. for breach of contract this week in U.S. District Court in Bluefield, claiming it stopped paying agreed-upon amounts in May.

The companies say they’d signed an agreement with Cobalt in July 2010 that gave them 4 percent of the average gross sales price per ton of coal sold, as long as that price remained under $95 per ton.

Some months, Cobalt made those payments, they say. In others, the payments were made by its “alter-ego,” Westchester Coal LP. But this spring, the payments stopped.

The lawsuit doesn’t specify how much the companies believe they are owed but demands damages. Fayetteville attorney Tom Rist said Thursday he believes his clients are owed about $100,000.

A Cobalt official didn’t immediately comment on the complaint, and the company has yet to file a response with the court.

The lawsuit says Cobalt was still actively mining as of this week and is now effectively trespassing because Gopher owns the land where the mine portal is located.

Westchester bought the mineral and surface rights and a mining permit in March 2008 for $1.6 million. The lawsuit says Westchester initially agreed to pay 7.5 percent royalties per ton, but the agreement was later amended.

Cobalt and the Westchester mine gained fame last year when Spike TV aired 10 episodes of “Coal,” a reality show about an atypical West Virginia operation.

A Spike spokeswoman told The Associated Press on Thursday there won’t be a second season.

The tight confines of the small mine don’t represent the reality of an industry largely dominated by corporations with massive mines that often have hundreds of workers and mining machines larger than houses.

Cobalt is small, with only about two dozen employees. Its crews mine a highly valuable metallurgical coal used in steelmaking, but the seam is notoriously thin, forcing them to work in a space just 42 inches high some 600 feet underground.

To shoot in the mine, 10 videographers trained for 80 hours and were certified as apprentice coal miners. The show was produced by Thom Beers, whose team is also behind the popular shows “Deadliest Catch,” “Ice Road Truckers” and “Ax Men.”

During the Cobalt filming, which ran from Nov. 9 to Jan. 21, federal inspectors also cited the Canadian-owned company for 19 health and safety violations. There were, however, no accidents or serious injuries.

For more information about Cobalt Coal, visit http://cobaltcoalcorp.com.