July 2 (UPI) -- About 1,700 coal mine jobs across four states are at risk after a major coal company and its affiliate filed for bankruptcy.
West Virginia-based companies Revelation Energy and its affiliate Blackjewel, filed for Chapter 11 bankruptcy Monday in the Southern District of West Virginia, court documents show.
The companies have about 1,100 employees in Kentucky, Virginia and West Virginia coal mines. They also employ about 600 workers at two coal mines in Wyoming. They cited at least $500 million in liabilities and inability to make July payroll in the filing.
The mayor of Cumberland, Ky., Charles Raleigh said he heard from two Revelation coal miners that the company shut down its mines near Cumberland for at least two weeks and perhaps longer, affecting an estimated 200 to 300 employees.
"It's devastating for the community," Raleigh said. "It's a sad situation. I hate it for the miners."
In an affidavit filed Monday, owner Jeff Hoops said the company has been struggling financially since 2012 with stricter regulatory oversight and more competition from natural gas and renewable energy.
"The entire industry either has gone through, or is currently going through, a period of financial distress and reorganization," Hoops wrote.
The U.S. Energy Information Administration ranked Revelation Energy LLC/Blackjewel LLC the sixth largest coal producer in the country in 2017.
Despite financial struggles, the company has grown significantly in Kentucky in recent years as permits ballooned from 88 permits on about 88,000 acres to 240 permits on more than 331,000 acres, a U.S. Office of Surface Mining Reclamation and Enforcement report shows.
Still, between 2017 and 2018, the company faced 134 notices of non-compliance with federal rules, including 259 violations of standard reclamation and environmental rules in Kentucky.
Two weeks ago another major coal company, Cambrian Coal, which oversees mining operations in Kentucky and Virginia also filed for Chapter 11 Bankruptcy.
Cambrian said in a statement that it expects its mining operations to continue through the bankruptcy.
It similarly blamed its bankruptcy on increased regulatory oversight and changing market demands.
Coal production has dropped dramatically in eastern Kentucky from producing 68 million tons of coal in 2011 to 17 million tons last year, a Kentucky Energy and Environment Cabinet report shows. Annual employment was reduced from over 13,000 jobs to fewer than 4,000 over the same period.