More than 50 Ohio Valley coal companies received loans totaling up to $ 119 million through the Paycheck Protection Program designed to keep people employed during the pandemic’s economic downturn.
Congress passed the PPP in March to help companies keep employees on payroll and out of unemployment lines. Data released by the Small Business Administration does not show specific dollar amounts for loans, but instead classifies loans in ranges of $ 150,000 to $ 350,000 at the low end and $ 5 million to $ 10 million at the high end.
Six Ohio Valley coal companies fell into that high-dollar category, including Rhino Energy, whose former CEO David Zatezelo He currently heads the Federal Mine Safety and Health Administration.
Five Bankrupt Lexington, Kentucky Subsidiaries Blackhawk Mining received loans totaling up to $ 14 million. Four of those five subsidiaries reported that the loan would affect zero employees. A spokesman for Blackhawk did not immediately respond to requests for comment.
Ramaco Resources, based in Lexington and mines in Pennsylvania and West Virginia, indicated that 381 jobs would be affected by the program, according to SBA records.
Y according to ProPublica, coal companies associated with the family of billionaire West Virginia Governor Jim Justice received up to $ 12 million from the program. Many of the Justice mines have a long history of payment failures fines and mining safety taxes.
Employment in the coal sector is uncertain at best; some coal miners say they go underground every shift, knowing that they may not have a job the next time they see the light of day. The pandemic has only the outlook worsened for miners. Only 43,800 Americans were employed in the coal industry in June, up from 51,000 last December, according to the Bureau of Labor Statistics. And a wave of bankruptcies has gripped most of the region’s coal producers.
Black gold rarities
To incentivize companies to use the funds to preserve jobs, PPP loans are eligible for forgiveness, which means that companies do not have to pay the money back to the government if the loans are used to cover salaries, benefits or tips from employees.
Indiana-based American Resources Corporation, which has mines in Kentucky and West Virginia, received up to $ 5 million through the program, even though the company has been criticized for not pay your employees long before the pandemic hit. In a recent bankruptcy court hearing, Judge Gregory Schaaf urged ARC attorney Billy Shelton to use the loan instead to pay court fees, waiving the possibility of forgiveness at a later date.
If ARC chooses that path, it would put additional financial pressure on a company that is already reeling under the weight of new liabilities that it acquired last year.
“I would wait [ARC] liquidate given current market conditions and available liquidity, ”said Josh Macey, assistant professor at the University of Chicago and a coal company bankruptcy expert referring to ARC’s financial condition at the time of the bankruptcy hearing. “There just isn’t enough cash right now to keep them going.”
PPP loans come amid a historic recession in the coal industry, which has only been exacerbated by the coronavirus pandemic. New renewable power plants are cheaper than new coal plants “pretty much everywhere,” according to a recent reportand the recalls of the Ohio Valley coal-fired power plants mean the market for the resource is likely to continue to worsen.