Sago Mine Shut, Tygart delayed, amid Sago Lawsuits

Last night Richard Engel was on Charlie Rose (video), talking about his new special on MSNBC, War Zone Diary. This is a reporter the right hates, as I found out when I looked for a picture on Google images. The above is from the reportercaps site, but there were other pictues at various “liberal media” expose and alert sites.

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Ken Ward, Jr.’s March 22, 2007 Charleston Gazette story “Sago Mine shut down: Company cites rising costs, slump in prices,” reports that International Coal Group confirmed the previous day that it had shut down the Sago mine on March 19. While there was no press release on the ICG site, it provided Ward with a prepared statement that high production costs due to the amount of coal decreasing relative to the amount of rock and weakening coal prices

made the Sago Mine unprofitable in the current coal market.

A small crew will remain employed at the Sago Mine to maintain the mine infrastructure in idle status and keep it available for restart should market conditions improve.

ICG had previously cut the workforce at the mine from about 85 in early 2006 to 48 at the end of December, according to disclosures filed with the U.S. Mine Safety and Health Administration. The remaining Sago workers have been offered jobs at other operations of ICG subsidiary Wolf Run Mining, the company said.

Production last year was down by more than a third over 2005, to about 323,000 tons of coal, according to MSHA data.

In other Sago news, according to Ward, this morning Kanawha Circuit Judge Charles King appointed Charleston lawyer Nick Casey to serve as a special commissioner to decide discovery disputes between lawyers in the 15 lawsuits filed by Sago victim families and by McCloy, saying the commissioner would help sort out the process of lawyers exchanging documents and scheduling depositions during the investigative phase of the cases. Separate suits have been filed on behalf of McCloy and the estates of 11 of the 12 miners who died in the disaster. Section foreman Martin Toler Jr. is the only victim for whom a suit has not been filed. Defendants in the cases include ICG and Wolf Run Mining, along with ICG founder Wilbur Ross and various Sago suppliers and contractors. King said he would schedule a hearing later on motions by Ross to be dismissed from cases in which he is personally named as a defendant.

Ward also noted that in early February, ICG announced it was delaying developing of its planned Tygart No. 1  longwall mine in Taylor County for at least a year due to “the weak market environment.” In late December, Allegheny Energy, the sole customer of ICG’s Sycamore No. 2 Mine in Harrison County, sued ICG for alleged breach of a coal supply contract. Sycamore had been idled after encountering adverse geologic conditions and unmapped abandoned gas wells. Last year, ICG reported a net loss of $9.3 million, compared to a net income of $31.8 million in 2005. The company’s total coal sales were 4.8 million tons in 2006, compared to 4.2 million in 2005.

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