International Coal Group

Note: On June 15, 2011, International Coal Group was acquired by Arch Coal.

International Coal Group (ICG) operates 12 mining complexes in Appalachia and one in Illinois. The company is owner of the Sago Mine in West Virginia, in which twelve miners died in January 2006 following an underground explosion. It is a member of the National Mining Association, the national trade organization which represents mining interests in all branches of government and in the media. and

In early May 2011, Arch Coal announced that it would take over the International Coal Group in a cash transaction worth $3.4 billion. Arch stated that the combined company would be "the second largest U.S. metallurgical coal supplier and a top-five overall global coal producer and marketer." On June 15, 2011, Arch Coal completed the acquisition.

History
ICG was formed in May 2004 "when investor Wilbur Ross led a group that bought many of the assets of Horizon Natural Resources in a bankruptcy auction." 

Investing in metallurgic coal
In Feb. 2011, ICG said it plans to spend heavily in 2011 to increase production of metallurgical coal for steelmakers, between $225 million and $245 million on capital projects for 2011. Approximately $80 million will be spent on developing the Tygart Valley No. 1 mine in Taylor County, West Virginia, and ICG plans to dig up 3.5 million tons of coal annually at the mine. Work on the mine resumed in 2010 after the state reinstated a permit over protests from opponents concerned that the state Department of Environmental Protection had approved an inadequate water-treatment plan. The company said coal sold to electric power plants sells for far less than metallurgical coal. ICG expects prices to average $73 to $77 a ton for all its coal in 2011, and production should range from 16.1 million and 16.7 million tons, including 3.1 million to 3.5 million tons of metallurgical coal.

Existing Mines
ICG has operating mines in the U.S., including Kentucky, Maryland, West Virginia, and the Illinois Basin:


 * Birch River Mine Complex
 * Blackberry Creek Mine
 * Classic Mine
 * Clean Energy Mine (ICG)
 * County Line Mine
 * Cypress Creek Mine
 * Dial's Branch Mine
 * East Mac & Nellie Mine
 * Elk Mountain Mine
 * Evans Fork Job Mine
 * Flint Ridge Mine
 * Flint Ridge Mine 2
 * Fort Grand Surface Mine
 * Imperial Mine
 * Jackson Mountain Mine
 * Knight-Ink Mine
 * Mount Sterling Branch Mine
 * New Hill Mine
 * Powell Mountain Mine 1
 * Rowdy Gap Mine
 * Sentinel Mine
 * Thunder Ridge Mine
 * Tip Top Mine
 * Vicco Mine
 * Vindex Douglas Mine
 * Viper Mine

Hampton Mine (West Virginia)
In June 2011, AP reported that Iternational Coal Group Inc. and its Wolf Run Mining Co. are seeking permits for an Hampton Mine in Buckhannon, a new 1,800-acre underground coal mine that would run below Buckhannon-Upshur High School and the proposed site of a new middle school in West Virginia. Application documents show ICG expects it to produce 1 million tons of coal a year for eight years. The Department of Environmental Protection says the school board wants a conference on the project, so a public hearing will eventually be scheduled.

Cold Comfort from a Coal Baron
The PR firm Dix & Eaton "is serving as 'media coordinator' for International Coal Group, the owner of the Sago Mine in West Virginia in which a dozen miners lost their lives," reports O'Dwyer's.

The U.S. Mine Safety and Health Administration had cited Sago Mine for 276 safety violations in 2004 and 2005, "including 120 that were considered 'significant and substantial.'" ICG, which bought the mine in November 2005, "has established a $2 million fund for the families of the lost miners." ICG owner, New York billionaire Wilbur Ross, said he understands the families' trauma since "I lost my own father when I was a teen-ager." Dix & Eaton has worked for Diebold, the International Steel Group and Adelphia.

In July 2006 O'Dwyer's PR Daily reported that ICG appointed Ira Gramm "to develop and handle its communications with investors and the press." (Sub req'd).

ICG VP calls for 527 organization to influence elections
In July 2010, it was found that Roger Nicholson, senior vice president and general counsel at ICG, had written a letter to other coal companies reading: “With the recent Supreme Court ruling, we are in a position to be able to take corporate positions that were not previously available in allowing our voices to be heard.” The Supreme Court decision that Nicholson was referring to is Citizens United, which loosened campaign-finance laws on corporations. Nicholson noted that the decision would allow companies to pool their money and defeat Democratic congressional candidates they consider “anti-coal." Nicholson listed three races “of interest”: Jack Conway against Republican Rand Paul for Kentucky’s open Senate seat; Ben Chandler against Republican Garland Barr in Kentucky’s 6th Congressional District; and Democratic U.S. Rep. Nick Rahall against Republican Elliott Maynard in West Virginia’s 3rd Congressional District.

The coal industry already has supported Barr and Maynard through individuals’ relatively small and legally limited donations. But working together as a 527, the companies potentially could spend millions of dollars on political activity, as long as it isn’t coordinated with the Republicans’ campaigns. In his letter, Nicholson said his company and three others — Massey Energy, Alliance Resource Partners and Natural Resource Partners — “have already had some theoretical discussions about such an effort and would like to proceed in developing an action plan.” Under Section 527 of the Internal Revenue Code, companies won’t have to publicly disclose their activities — such as advertising — until they file a tax return next year, long after the Nov. 2, 2010 election.

Several of those companies have been involved in recent mine disasters that led to congressional scrutiny of their safety problems. International Coal Group owned the Sago Mine in West Virginia where 12 miners died in 2006. Massey owned the Upper Big Branch Mine, also in West Virginia, where 29 miners died in April 2010. Two miners died in April in a Western Kentucky mine owned by an Alliance Resource subsidiary. In the wake of the Upper Big Branch Mine Disaster, the MSHA and Congress are considering tighter coal miner safety oversight.

Citizens suit over falsified monitoring data at ICG mines
On October 7, 2010, Appalachian Voices, Kentuckians For The Commonwealth, Kentucky Riverkeeper, and Waterkeeper Alliance filed a sixty-day notice letter alleging that the companies ICG Knott County, ICG Hazard, and Frasure Creek Mining, a subsidiary of Trinity Coal, exceeded pollution discharge limits in their permits, consistently failed to conduct the required monitoring of their discharges and, in many cases, submitted false monitoring data to the state agencies charged with protecting the public. Joining in the lawsuit were several local residents impacted by the dumping of mining waste into Kentucky’s waterways.

The coal companies cited in the notice letter are all operating in the eastern part of Kentucky under state-issued permits that allow them to discharge limited amounts of pollutants into nearby streams and rivers. Those same permits also require industries to carefully monitor and report their pollution discharges to state officials. These monitoring reports are public documents that can be reviewed by anyone who asks for them. Among the allegations cited in the notice letter are exceedances and misreporting of discharges of manganese, iron, total suspended solids and pH. The groups and local residents bringing these claims cite a total of over 20,000 incidences of these three companies either exceeding permit pollution limits, failing to submit reports, or falsifying the required monitoring data.

ICG pays $350,000 fine for violations
The companies and the state had 60 days to review the October 2010 letter. In court documents filed December 3, 2010, the 59th day, the Energy and Environment Cabinet said it found no evidence of intentional fraud but did find lax procedures and documentation at the two labs. The state's review also found seven instances of discharged pollutants exceeding acceptable levels. The coal mine operators will pay $660,000 to the state because of the violations. The state is also expanding its audit into about two dozen other laboratories that contract with the coal industry. Gov. Steve Beshear called for the labs to be certified by the state, something required for labs that test drinking water but not for coal industry-specific labs. In an interview, state officials also acknowledged that surface mine regulators haven't kept up with reviewing monitoring reports, some of which the environmental groups said were simply photocopied or partially forged from month to month.

The New York-based Waterkeeper Alliance speculated in October 2010 that each of the violations could have netted a penalty of $37,500 for the more than 20,000 violations it found in its review, which would add up to about $750 million. Donna Lisenby of the group Appalachian Voices called the $660,000 settlement for about 3,000 violations the state found "a slap on the wrist." Lisenby said the groups are continuing their review of other companies' discharge monitoring reports and will watch the state's actions. The state filed its lawsuit and settlement agreement in Franklin Circuit Court ordering Frasure Creek Mining to pay $310,000 and four subsidiaries of ICG — East, Knott County, Hazard and Powell Mountain Energy — to pay a total of $350,000. The money will go to the state's Heritage Land Conservation Fund.

In January 2011, the state Cabinet called the motion by eight groups and individuals to intervene in the $660,000 settlement with coal companies "an unwarranted burden." The Cabinet called allegations that the state did a poor job of investigating complaints "bordering on specious" and said the environmental groups have no standing to join a suit in state courts over alleged violations of federal law.

Environmental groups challenge settlement and file federal lawsuit
In October 2011, Appalachian Voices, Kentucky Riverkeeper, Waterkeeper Alliance, and Kentuckians for the Commonwealth said the $660,000 settlement was too low and filed federal lawsuits against the defendant companies under the Clean Water Act. The federal suits ask for civil penalties of up to $37,500 per day for each violation of the Clean Water Act.

June 2011: Groups say water violations continue
Citing gaps in state regulatory enforcement and continuing violations, Appalachian Voices, Kentuckians For The Commonwealth, Kentucky Riverkeeper and Waterkeeper Alliance filed two sixty-day notice letters on June 28, 2011, alleging that ICG and Frasure Creek Mining exceeded pollution discharge limits in their Clean Water Act permits more than 4,000 times in the first three months of 2011. Also joining in the Notice were several local residents impacted by the dumping of mining waste into Kentucky’s waterways. In October of 2010, the groups filed similar notice letters against ICG and Frasure Creek for more than 20,000 violations of the Clean Water Act, alleging that the companies had falsified discharge monitoring reports by illegally filing the same data month after month. The groups say the alleged violations could have resulted in fines in the hundreds of millions of dollars under the Clean Water Act.

According to a press release by the groups, "the October filings prompted Kentucky Energy and Environment Cabinet officials to take industry-friendly actions to short-circuit the potential citizen lawsuits.... the officials proposed a settlement with the two companies, citing only 2,765 violations of the Clean Water Act and proposing fines against ICG and Frasure Creek of just $660,000. One of the arguments they used to justify the small number of violations and low penalties was that many of the violations were merely 'transcription errors,' not violations of pollution limits, and therefore did not warrant higher fines."

According to Scott Edwards, Director of Advocacy for Waterkeeper Alliance: “These new violations show two things. First, it exposes the Cabinet’s deal with the coal companies for the ineffective, choreographed sham we always knew it was, and second, it shows that it is almost certain that all those “transcription errors” the Cabinet relied on to soft-pedal its settlement approach were really pollution discharge violations disguised as reporting errors.”

According to Grist, since the October 2010 suit there has been more accurate monitoring of water quality from the companies, which is showing substantial violation of federal and state laws, leading to the June 2011 suit.

October 2012: $575,000 settlement reached
On October 5, 2012, International Coal Group — now part of Arch Coal — and environmental groups filed an agreement that assesses $575,000 in penalties for the Kentucky violations and directs the money to environmental improvement projects. The amount reflects the original $350,000 assessment in 2010 plus an additional $225,000 from more recent alleged violations.

Selenium discharges at Knight-Ink Mine
On March 23, 2011, three environmental groups sued coal operator ICG Eastern in federal court over the Knight-Ink Mine, saying the mine had been discharging toxic selenium into streams for years. The mine is in east-central West Virginia, near the Monongahela National Forest. The Sierra Club, the Ohio Valley Environmental Coalition and the West Virginia Highlands Conservancy filed the case in U.S. District Court in Elkins, alleging violations of state and federal law, including the federal Clean Water Act and the Surface Mining Control and Reclamation Act. The complaint also claims state regulators have been lax in cracking down on ICG, allowing discharges into Big Beaver Creek, and two tributaries, Oldhe Fork and Board Fork, at levels above those designed to protect aquatic life.

Selenium discharges at Thunder Ridge Mine
On May 25, 2011, the Sierra Club filed a lawsuit in U.S. District Court in London, Kentucky, accusing ICG Hazard of violating the federal Clean Water Act and Surface Mining Control and Reclamation Act of 1977 at the Thunder Ridge Mine in Leslie County, KY. The group is seeking an order requiring ICG Hazard to install selenium treatment facilities at the mine and pay $37,500 in fines for each day the law was violated. ICG Hazard's permit for the Thunder Ridge mine allows it to discharge some pollutants to Lower Bad Creek and several tributaries, including Greasy Creek and Roundhole Branch of Greasy Creek. The lawsuit said ICG Hazard, which the company said produced 3.7 million tons of coal in 2009, has discharged selenium into the water at levels that could harm aquatic life and exceeded Kentucky's standard for what is allowable. High levels of selenium in humans may cause hair and fingernail loss, with long term exposure damaging the kidneys, liver, nervous and circulatory systems. In aquatic life, selenium can cause reproductive failure, birth defects and damage to gills and internal organs.

Judge rules ICG owes Allegheny $104 million
On May 2, 2011, a trial court judge held that ICG’s Wolf Run subsidiary breached its coal supply agreement with Allegheny Energy and is liable for past and future damages and interest in the total amount of $104 million. Allegheny, the sole customer of coal produced at Wolf Run’s Sycamore 2 Mine, filed a lawsuit in 2006 claiming that Wolf Run breached a coal supply contract when it declared "force majeure" upon temporarily idling the mine in the third quarter of that year, and failing to ship thereafter the volumes referenced in the contract.

Stay on proposed New Hill Mine
In November 2010, West Virginia’s Environmental Quality Board temporarily blocked a water pollution permit for ICG subsidiary Patriot Mining Company’s New Hill Mine in Monongalia County, West Virginia. Sierra Club lawyers sought the temporary stay because the company had planned to begin blasting in November, while a hearing on the group’s appear of the water pollution permit was not scheduled to begin until mid-December. The water permit in question already covers discharges from five previously approved surface mining permits, with Patriot Mining wanting to add another 225-acre operation that would discharge into Scotts Run of the Monongahela River drainage. The notice of appeal filed by the Sierra Club cites, among other things, what the Sierra Club says it the mine’s inability to meet the new water quality standards outlined in EPA’s major guidance document on conductivity.

Report finds lower life expectancy near ICG mountaintop removal operations
In June 2011, a study was published in the journal Population Health Metrics, "Falling behind: life expectancy in US counties from 2000 to 2007 in an international context". Grist noted that analysis of life expectancy data released with the study showed that:


 * All of the eight counties in Kentucky where ICG and Frasure Creek operate mountaintop-removal mines are among the bottom 10 percent of U.S. counties in terms of life expectancy;
 * All but two have seen a decrease in life expectancy over the past 10 years;
 * Two of the counties, Perry and Pike, which happen to be the two biggest coal producing counties in Kentucky, were both among the bottom 10 (out of 3,147 counties) for trends in life expectancy between 1997 and 2007. While nationwide life expectancy increased by 1.5 years over the decade, average life expectancy in these two counties actually decreased by about a year; and
 * All eight of the counties have lost population over the 20 year period of the study.

Contact details
2000 Ashland Dr. Ashland, KY 41101 Phone:	606-920-7400

Other SourceWatch resources

 * Crisis management
 * Kentucky and coal
 * Sago Mine Disaster