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updated: 7/9/2014 4:58 PM

Coal company says Illinois rival breached deal

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  • Robert Murray, chief executive of Ohio-based Murray Energy Corp., alleges that rival Williamson Energy LLC violated an agreement and used proprietary information to thwart tMurrary's expansion plans in southern Illinois.

      Robert Murray, chief executive of Ohio-based Murray Energy Corp., alleges that rival Williamson Energy LLC violated an agreement and used proprietary information to thwart tMurrary's expansion plans in southern Illinois.
    Associated Press

 
Associated Press

A leading U.S. coal company is suing a rival with which it shared confidential business plans during a deal that later fizzled, saying the competitor used the proprietary details to buy up land in southern Illinois to thwart the accuser's expansion plans.

Murray Energy Corp., a privately held Ohio-based company, alleges in a lawsuit Saline County, Illinois, that Williamson Energy LLC breached terms of a confidentiality agreement in 2008 when Murray was trying to sell it operations in the southern Illinois.

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Under the agreement, the lawsuit claims, Williamson pledged not to disclose or use any of Murray's confidential information to acquire mineral or property rights related to Murray's operations for eight years.

Murray claims Williamson has done just the opposite since 2009, buying cherry-picked parcels and mineral rights at above-market prices -- in some cases, four times the going rate -- "directly in the path" of Murray's mining operations. Murray alleges it planned to buy or lease those tracts, that the parcels are too small to offer mining potential to Williamson, and that Williamson bought the land "to hinder MEC's operations to gain an unfair competitive advantage."

Murray said it has been forced to spend millions of dollars to pre-emptively buy or lease mineral rights, presumably before Williamson also snatches those.

Williamson had the "clear intent to illegally block Murray Energy's operations, to threaten the jobs of thousands of coal miners, and to gain unfair competitive advantage in this very depressed coal marketplace," Murray said in a statement.

The lawsuit seeks to prevent Williamson from further breaching the confidentiality deal, force Williamson to offer Murray mineral rights to the questioned properties, and order Williamson to pay Murray "substantial damages."

Messages left by The Associated Press with Foresight Energy, Williamson Energy's corporate parent, have not been returned.

Murray is among the nation's most vocal coal producers. In May, the company filed a lawsuit challenging new federal regulations to cut the amount of coal dust in coal mines, saying they are overly burdensome and costly to the industry.

And last month, Murray filed a federal lawsuit meant to block the Environmental Protection Agency's new carbon emissions for power plants. The proposed EPA rules seek to reduce global warming by forcing a 30 percent cut in carbon dioxide emissions from 2005 levels by 2030. Murray calls the rules "illegal, irrational, and destructive" and argues they will destroy millions of jobs.

Murray Energy employs more than 7,200 people in West Virginia, Ohio, Kentucky, Illinois, Pennsylvania and Utah, according to the company's website. More than 900 of those workers are in Illinois, the Mine Safety and Health Administration said.

Foresight has 3 billion tons of coal reserves in central and southern Illinois, supporting four mining complexes. The number of the company's employees in southern Illinois wasn't immediately available Wednesday.

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