According to an Associated Press report, Encoal Energy and Gopher Land Services told the Federal Court the breach of contract occurred in May, when Cobalt halted payments under a July 2010 agreement that would give them 4% of the average gross sales price per tonne of coal sold if the price was at or less than $US95/t.
The AP reported that in their complaint, the two said Cobalt made the payments some months, while other months they were made by its owner, Canada-based Westchester Coal.
All payments stopped three months ago.
Encoal and Gopher are asking for damages, however, the news service said the suit documentation did not specify how much they were owed.
The plaintiffs’ attorney, Tom Rist, estimated the missing royalties at about $100,000.
They also said in the suit that because Gopher owned the land where the mine was situated and because the company was actively mining, it was effectively trespassing.
Cobalt has not released a public statement on the filing and the AP reported that no response had yet been filed by the producer.
Westchester Coal bought the mineral and surface rights for the mine, as well as the permit, for about $1.6 million in March 2008.
An initial royalty detail outlined a 7.5% royalty but it was later amended.
Cobalt’s Westchester mine was the subject of a 10-episode documentary/reality series, Coal, on US television station Spike TV.
A spokesman last week told the AP there would not be a second season of the series.
