MORGANTOWN, W.Va. -- The operator of the McDowell County 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.