Texas coal miner tangled in legal dispute; bankruptcy looms

Luminant Mining Co., Texas' largest power provider, has spent the past month battling bankruptcy and landowners. With more than more than $30 billion in debt the company is also struggling to claim the remaining 25% of a plot of land which it needs to begin a mining operation.

The 9-acre parcel in Dirgin, Texas is part of a complex inheritance arrangement between the children of former slaves who worked the land, the Associated Press reports. 

Negotiations over the parcel have been ongoing for three years. Now, for the first time the company has started a lawsuit against the remaining six owners – all of whom are located in California – with each party claiming between 1/20 and 1/60 of the land, according to Luminant.

"We have not been in this situation before," a company spokesperson told MINING.com in an e-mail. "Texas law provides a way forward in such a situation that we, for the first time, are pursuing as a last resort."

As the majority owner, the miner has filed a partition suit which it hopes will force a settlement. The court may either determine how to fairly divide the area or order a sale of the property.

Meanwhile the coal miner is also facing bankruptcy over $30 billion in debt – an amount shared between Luminant and its parent company, Energy Future Holdings, the Associated Press reports.

The firm's financial situation made headlines recently after it was given the green light to expand operations in Tatum, Texas in spite of the crushing debt.

The approval and money troubles have some environmental groups questioning whether Luminant will have the cash to pay for the reclamation of mined land – a requirement under federal law.

If a bankruptcy case is settled, the firm will may have to shut down some plants or mines which would then require reclamation.

See the full AP story here.

Creative Commons image by: Robert Scoble