St. Louis-based Foresight Energy, which operates coal mines throughout the Illinois Basin, announced a settlement Friday on litigation surrounding two of the company’s Illinois mines — each about an hour north of St. Louis.
The announcement said that Foresight would pay $25 million “in consideration of disputed past due amounts” to Natural Resource Partners, a Houston-based company that owns interests in coal and industrial minerals around the country.
The disputes in question involved Foresight’s Deer Run mine near Hillsboro and its Shay mine near Carlinville.
At the Deer Run mine, a 4-year-old underground fire has crippled operations, which were fully halted in late 2015. After intermittent indications that it could resume activity at the site, Foresight said it aimed to permanently close the mine and end its accompanying lease for mineral rights in a Securities and Exchange Commission filing this year.
Last year, the fire cost Foresight $42.7 million — a sizable chunk of the company’s $215 million losses overall. It estimated that permanent closure of the mine would mean an additional hit of $134 million to $172 million, accounting for lost mineral reserves, machinery and other assets.
But as part of the settlement announced Friday, Foresight agreed to amend the lease at the Deer Run mine to pay Natural Resource Partners a minimum of $11 million annually and “extend the current lease term through the end of 2033.”
“We are pleased to have reached a mutually beneficial resolution in these lawsuits,” said Robert Moore, Foresight’s president and CEO, in a statement. “These agreements provide us with long-term control of our coal reserves and operational flexibility at [the] Deer Run mine.”