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ICG never requested transfer of permit for Sago operation

On Nov. 18, New York billionaire Wilbur Ross’ International Coal Group bought the Sago Mine in Upshur County as part of its acquisition of Anker Coal Group Inc.

Seven weeks later — and after a disastrous explosion that killed 12 miners — the company, known as ICG, has still not sought or received required approval to take over a state permit for the Sago Mine, government records show.

No permit transfer application has been filed at the state Department of Environmental Protection’s headquarters in Charleston or DEP’s regional office in Philippi.

“It hasn’t even been submitted yet,” said Jessica Greathouse, the DEP’s communications director. “We don’t have any paperwork for a permit transfer.”

If ICG had sought permit transfer approval, DEP officials would have performed a thorough background check.

With such a review, DEP would make sure ICG is not permit blocked because of past environmental violations. They would ensure the company has adequate reclamations bonds, workers’ compensation coverage and other insurance. DEP would demand proof that ICG has the capital and expertise to operate a responsible mine.

Under federal and state mining law, it is illegal for anyone to operate an underground or a surface mine without a permit.

If companies buy existing mining operations with permits, and do not transfer those permits within certain time limits, they are considered to be mining without a permit.

But when a DEP inspector last visited the Sago Mine, on Dec. 1, he did not cite the company for the lack of an approved permit transfer.

State law says one company may not sell mining rights granted by a DEP permit to another company without prior approval by DEP.

Under rules DEP wrote to implement the law, companies must report such transactions to DEP within 30 days. That report starts the process of obtaining a permit transfer.

But DEP officials said Thursday that they believed that 30-day notification was not necessary in this case.

They pointed to an alternate rule that allows companies to not report mine takeovers for 120 days if the deal does not involve a change in the “immediate owners and controllers of the permittee or operator.”

State mining rules define “owns and controls” as, among other things, “any relationship which gives one person authority directly or indirectly to determine the manner in which an applicant, an operator or other entity conducts surface mining operations.”

Tom Clarke, a DEP lawyer, said that ICG did not actually buy the company that is listed as the current permittee of the Sago Mine.

Instead, ICG purchased a parent company called Anker Coal Group, according to U.S. Securities and Exchange Commission disclosures.

Clarke said that Anker Coal Group owns 100 percent of another company called Anker Group. Anker Group owns 100 percent of a third company, called Anker Energy, Clarke said.

Finally, Anker Energy owns 100 percent of Anker West Virginia Mining — the company that is listed as the permittee for the Sago Mine, according to Clarke and DEP permit records.

“It appears as though ICG — the big company — is a layer or two above the operational level, so the 120-day standard would apply,” said Randy Huffman, director of the DEP Division of Mining and Reclamation.

Huffman said that he asked DEP staff to look into the issue on Tuesday, after he saw media reports about the timing of the ICG buyout of Anker.

“I don’t want to get too caught up in the semantics here,” Huffman said. “I believe that they took ownership on Nov. 18 and that triggers a 120-day clock, and that if we don’t receive notification from them within that 120 days, then we write a notice of violation.”

Greathouse, the DEP spokeswoman, added, “We’re splitting hairs on the word ‘immediate.’ Anker is three layers removed from ICG, and therefore they have 120 days.”

ICG officials did not return a phone call Thursday.

Staff writers Scott Finn and Eric Eyre contributed to this report.

To contact staff writer Ken Ward Jr., use e-mail or call 348-1702.


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