Mine closings have Wayne County official wondering what will be - Beckley, Bluefield & Lewisburg News, Weather, Sports

Mine closings have Wayne County official wondering what will be cut

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Word that Argus Energy is closing two mines and related trucking services in Wayne County next month has the president of the Wayne County Commission wondering what the county will be cutting from its budget.

It's not just the operations in Wayne County that are affecting county operations. The way coal severance tax revenues are distributed, it's the condition of the coal industry in general throughout West Virginia, he said.

"The tragedy is all these people losing their jobs and the ripple effects it will have in our community," said Bob Pasley, president of the Wayne County Commission.

Argus Energy LLC announced Nov. 5 it will cease operations at its Number 7 and Number 8 mines at Dunlow in southern Wayne County, along with a preparation plant. That closing affects 177 employees. The company also said it will close Kiah Creek Transport trucking services at Dunlow and Kenova, affecting 59 employees.

"A series of adverse events including, without limitation, the inability to timely secure permits, interruptions in operations due to regulatory enforcement actions and weak coal market conditions have given management no choice but to make the decision to begin the process of winding down production operations at Argus," James H. Booth, resident of Argus and KCT, said in a written statement. "This has been a very difficult decision and we are deeply saddened by the loss of jobs that will result from the idling of our operations."

The statement issued Nov. 5 said some employees affected by the closing may be retained for reclamation and other purposes.

The federal Mine Safety and Health Administration issued 40 citations against Mine 8 following a November 2012 impact inspection. The inspection was the result of a Pattern of Violation notice MSHA had issued earlier that year.

In 2012, the two mines produced 639,415 tons of coal — about one-sixth of Wayne County's total output.

The closing of the mines could have other effects on business activity in Wayne County, and that could cut into the county's general revenue tax collections along with the decline in severance taxes, Pasley said.

"We're going to have to look at eliminating some of the things we spend in the coal severance fund," Pasley said. "It's not going to be pretty."

In 2012, Wayne County received about $724,000 in the statewide distribution of coal severance tax funds to counties. The state keeps 93 percent of severance tax collections. The other 7 percent is distributed to county and municipal governments. Counties receive three-fourths of the 7 percent distribution based on population, and the remaining quarter is divided among municipalities and county sheriff offices.

Wayne County uses severance tax money to buy ambulances, to help fund its economic development authority, to help fund the county housing authority, to help pay its regional jail bill and to work on the county courthouse and other county-owned buildings, Pasley said.

"When we go to budget next year, we'll have to look really, really close at what we can continue to do," Pasley said.

In Wayne County, the 25 percent distribution was divided among the municipalities of Huntington, Ceredo, Fort Gay, Kenova and Wayne, along with some going to the sheriff's office.