LEXINGTON, Ky. — The vice president of Blackhawk Mining tells MetroNews the company looks to rehire a substantial portion of those employees who now work for Patriot Coal.
Blackhawk is in the process of buying out six Patriot operations across southern West Virginia. The purchase includes 12 deep mines and one surface mines along with coal preparation plants and other facilities.
“Upon closings, we expect to run the operations that are active now,” said Vice President Jesse Parrish. “Envision hiring a substantial majority of the workforce that’s currently running the mines.”
About all Patriot employees know officially is they’ll probably be laid off by Patriot later this month. The sale of Patriot to Blackhawk, which was approved last week by a U.S. Bankruptcy judge, is expected to be final later this month.
Parrish said the model for Blackhawk has been to transition away from the Central Appalachian thermal coal market to concentrate more on metallurgical coal. The acquisition of the Patriot properties fits into their business plan.
“These operations represent the core of Patriot’s metallurgical coal segment,” said Parrish. “Unlike thermal coal in central Appalachia, which has undergone a systemic change, we believe in the long term fundamentals of the metallurgical market.”
Parrish said in 2013 Blackhawk had 92 percent of its sales in central Appalachian thermal coal. He said by next year they expect that to be reduced to 25 percent as they further diversify the kinds of products they are delivering to the market. The six Patriot operations they are buying include an extremely high quality metallurgical coal product.
The idea will be to have a seamless transition for the employees with no work stoppage during the change in ownership. However, Parrish said the details of how that will work are still being discussed.
“We’re still planning the logistics of how we’re going to hire these people, it’s a lot of folks,” he said. “We’re still planning how we’re going to extend offers and all of that good stuff.”
Three of the mines and three of the preparation plants which are part of the buyout in bankruptcy court are union. Parrish said the company had recently reached an agreement in principle with the United Mine Workers of America on a new collective bargaining agreement. The agreement still needs to be finalized.
The buyout is a substantial increase, but not the first exposure Blackhawk has had in West Virginia. A year ago they bought out James River Coal which was the old Buck Harless properties in Mingo and Logan Counties.
“We’ve had a good run there and we’re looking forward to an expanded presence in the state of West Virginia,” he said.
Blackhawk is privately owned and operated. The majority owner is Mitch Potter and the Potter Family. Potter is a second generation coal miner from Eastern Kentucky. Blackhawk was formed in 2010 and today is headquartered in Lexington, Kentucky. Parrish, who is from Pikeville, Kentucky, said the company’s entire management team is native to eastern Kentucky and southern West Virginia.