Coal company in liquidation limbo has amassed six-figure delinquent DEP fine debt

The violations stretch across nine of South Fork’s 17 DEP-issued permits and are heavily concentrated in the Gauley River watershed in Greenbrier County, with many of the fines piling up for violations that have grown more frequent in recent months amid the decline of Boone County-based South Fork parent company White Forest Resources, Inc.

One of the permits on which South Fork is delinquent is for the Rocky Run Surface Mine in the Gauley River watershed. The DEP has issued South Fork 40 violations on the 1,158-acre permit since the start of 2021, including 14 since May 2025. The DEP has cited South Fork failures to protect offsite areas from mining damage occurring during surface mining, establish vegetative cover and prevent on regraded areas, and construct sediment control.

The DEP has issued 48 other violations to South Fork since the start of 2021 across three other permits on which the company owes delinquent fines for its Blue Knob Surface, Laurel Creek Contour No. 1 and Pretty Ridge Surface mines spanning roughly 1,764 acres in the Gauley River and Upper Kanawha River watersheds. The agency has cited South Fork failures to prevent excessive erosion in a drainage area and maintain a sediment ditch, as well as allowing surface water from an unmaintained haul road to flow into a stream.

White Forest Resources and 10 affiliates that included South Fork last month moved to convert their Chapter 11 bankruptcy cases into Chapter 7 cases in the U.S. Bankruptcy Court for the District of Delaware. Under Chapter 11 bankruptcies, businesses generally restructure but continue to do business supervised by a court-appointed trustee to reorganize their operations. Under Chapter 7 bankruptcies, a business liquidates assets to satisfy its debts.

White Forest Resources indicated failure to sell its South Fork mining operation in its liquidity move, which followed a February Chapter 11 bankruptcy petition. No competing bids were received at a July bid deadline for South Fork mine assets, according to the Chapter 7 filing.

White Forest Resources did not respond to a request for comment.

“I’m not surprised that South Fork has struggled to find a buyer for these mines,� Willie Dodson, coal impacts program manager at Appalachian Voices, a regional environmental nonprofit, said in a statement. “The company’s years-long pattern of neglecting environmental protections has led to a situation where its coal reserves are largely depleted, but its mines are saddled with massive liabilities. What company would want to buy that kind of mess?�

Olivia Miller, program director for the West Virginia Highlands Conservancy, called on the DEP to seize South Fork reclamation bonds and use that money to reclaim the company’s mines.

“It was the West Virginia DEP that allowed this company to wreck the mountains and pollute the river,� Miller said in a statement.

DEP spokesperson Terry Fletcher declined to comment on the delinquent fines and the agency’s reclamation bond oversight.

“This is pending litigation that we are monitoring to determine the best path forward for the interests of the state of West Virginia,� Fletcher said in an email.

For now, South Fork remains on the hook for its liabilities, which conservationists view as too many for West Virginia’s landscape to have to endure — in and beyond the Monongahela National Forest, where federal regulators recently approved the company to haul coal.

“The destruction being caused by South Fork Coal is reckless and irreversible,� Miller said.

Feds found firm could use forest haul road

In July, five months after White Forest Resources’ Chapter 11 bankruptcy filing, the federal Office of Surface Mining Reclamation and Enforcement determined South Fork had the right to use a haul road within Monongahela National Forest. The decision has allowed South Fork to maintain a surface coal mining and reclamation permit for the road and to use it to access and haul coal from the DEP violation-saddled Rocky Run Surface Mine on property adjacent to the forest.

Federal law prohibits surface coal mining operations on federal lands within the boundaries of any national forest in the eastern U.S., except for surface operations and impacts incidental to an underground coal mine. That exception didn’t apply to South Fork’s case.

But the OSMRE found South Fork had the right to use the 1.2-mile portion of the road in question for surface coal mining operations based on a determination the road existed within the forest before the 1977 Surface Mining Control and Reclamation Act governing mine road rights.

South Fork had a road use permit granted by the U.S. Forest Service in 2021. But the Center for Biological Diversity led a still unresolved lawsuit filed last year challenging that permit, contending the Forest Service violated the Endangered Species Act by allowing the permit without ensuring it wouldn’t harm endangered species and violated the National Environmental Policy Act by not performing environmental analysis required by it.

“This is a sad day for West Virginia’s public lands and everyone who cherishes them: for the communities who rely on clean headwater streams for drinking water and recreation, for the forests that give us clean air, and for the endangered species that depend on the cold, clear waters of the Gauley River watershed,� Miller said after the OSMRE’s July 18 decision finding South Fork had the right to use the haul road.

“This decision encourages coal companies to break the law first and ask forgiveness later, risking permanent harm to our most cherished public lands,� Andrew Young, staff attorney at the Allegheny-Blue Ridge Alliance, a regional conservation nonprofit.

Audit found W.Va. reclamation insolvency risk

Coal companies require permits that mandate bonds ensuring that if they go bankrupt, there’ll be sufficient funds to perform whatever reclamation work they promised when they received their permit.

But a 2021 audit report found lawmakers and environmental regulators risk letting West Virginia’s mining reclamation program slip into insolvency through gaping holes in statutory and permitting oversight.

The report found the DEP failed to comply with state and federal law in its reclamation program oversight, resulting in missed opportunities to financially shore up a program that will keep requiring hundreds of millions of dollars to reclaim permit sites per federal regulations.

The state’s per-acre coal mining reclamation bond limits may not be enough to guarantee the solvency of the state’s mining reclamation program, the report said.

Rising reclamation costs have devalued permit bonds since the current limits were established by state code in 2001, the report observed, while the cost of reclamation has increased significantly.

In 2022, the West Virginia Legislature passed Senate Bill 1, which created a private mutual insurance company with $50 million in taxpayer money as a lifeline to coal mine operators.

But SB 1 opponents said the mutual insurance company would attract high-risk companies that have struggled to secure bonds elsewhere in the private sector, increasing the likelihood the state would have to contribute more taxpayer money to the fund long-term.

Concerns over state of Gauley River

In December 2024, the West Virginia Highlands Conservancy and Appalachian Voices, filed a lawsuit against South Fork alleging violations of clean water and surface mining reclamation laws at its Rocky Run, Blue Knob and Lost Flats mines in Greenbrier County. That case, which alleged pollution up to 1,094% over permit limits into tributaries of the Cherry River, was put on hold in February after the Chapter 11 bankruptcy filing.

The DEP listed 13 miles of the Gauley River as impaired in a draft statewide water quality assessment report it released in July. In April, American Rivers, a waterway protection advocacy group, named the Gauley River to its annual list of America’s most endangered rivers, citing the threat of toxic pollution from coal strip mining in the headwaters of the Cherry River.

David Moryc, senior director of river protection for American Rivers, in an April statement called South Fork’s coal-hauling activity within the Monongahela National Forest “a severe abuse of the public trust."

“It simply isn’t fair for one company not to play by the rules and to profit at the expense of West Virginians’ water, outdoor heritage and wildlife habitat,� Moryc said.

But since White Forest Resources may have come up pivotally short on profits, there’s more than enough environmental and financial liabilities to go around.

“The Cherry River and the Monongahela National Forest,� Young said, “are nothing but collateral damage as far as these inept profiteers are concerned.�