Coal news and updates

Murray Energy Corp. sued a Foresight Energy LP (FELP) unit, claiming it used confidential information to acquire property and mineral rights directly in the path of Murray’s operations in southern Illinois.

 

Murray is asking an Illinois court to prevent Foresight’s Williamson Energy from buying or leasing mining rights that would “interfere” with its longwall coal operations in the region, the St. Clairsville, Ohio-based company said in a statement today. The company also seeks to force Foresight to offer mining rights to the disputed properties and an award of “substantial damages.”

 

Williamson began buying rights to land “directly in the path” of Murray’s planned mines a year after being given access to that confidential information when the company’s Illinois coal operations were up for sale, according to a complaint filed in state court in Harrisburg, Illinois, on July 3.

 

The tracts “provide no mining potential to Williamson,” Murray said. “The only economic value of these purchases to Williamson is to frustrate MEC’s ability to execute its mining plans.”

 

Several Suits

 

Closely held Murray is owned by Chairman and Chief Executive Officer Robert E. Murray, who has sued the federal government several times this year over environmental regulations that he says threaten the viability of the coal industry. Murray said in today’s statement that it operates 12 active coal mines in six states and employs about 7,300 people.

 

A spokesman for St. Louis-based Foresight declined to comment on the lawsuit. The company, which went public last month, fell 7 cents to $20.37 at 1:20 p.m. in New York trading. Foresight was founded by Chris Cline in 2006.

 

According to Foresight’s website, Williamson operates the Pond Creek No. 1 mine in Williamson and Franklin counties in southern Illinois. It started producing coal in 2006 and began longwall mining in 2008.

 

That process, according to the complaint, filed in neighboring Saline County, involves the shearing of coal-seam panels about 1,500 feet (457 meters) wide and several miles long. In the filing, Murray called Williamson a “primary” competitor.

 

Strategy Disclosure

 

In 2008, Murray disclosed its longwall strategies to Williamson as it considered selling off operations in three Illinois counties, according to the complaint. Williamson was allowed to see the information only after agreeing to not disclose it or otherwise use it to acquire mineral or property rights related to Murray’s operations for eight years, according to the complaint.

 

When the companies failed to reach a deal, Williamson and its affiliates allegedly started overpaying for mineral rights in Murray’s planned longwall path in 2009 and continued to do so as recently as 2013. Murray said in the complaint that the tracts aren’t sufficient to support independent mining.

 

Murray said those purchases have forced it to pay more for its own acquisitions, caused it to relocate equipment and threaten its ability to meet production contract requirements.

 

The case is Murray Energy Corp. v. Williamson Energy LLC, 14-MR-25, First Judicial Circuit Court of Illinois (Saline County).

 

 

Source: Bloomberg