New Elk, a subsidiary of Cline Mining, signed a five-year lease agreement with the Port of Corpus Christi in Texas in 2011 for an 18-acre tract of land to be developed into a coal export pad.

When it announced the signing of the lease in 2011, Cline said the facility was capable of supporting a throughput of up to 2Mtpa of coal, which it planned to export from its New Elk mine in southern Colorado.

The financially troubled company confirmed in July 2012 it would temporarily suspend mining at the operation in a cost-management move to help the operation’s long-term growth plans, negating the need for a storage and export facility.

In the minutes of its latest meeting on August 13, the PCC said New Elk had requested to terminate its lease agreement for the site.

“Due to a decline in the coal market, New Elk has been unable to develop the intended coal export pad, and the 18-acre lease has remained unused for the last two-and-a-half years.

“New Elk’s owners and representatives, Cline Mining Corporation, are no longer interested in developing the site and due to financial difficulties have requested early termination of the lease.”

The PCC said that the company consistently paid its monthly rent, but was unable to pay the minimum throughput agreed upon in the original lease and as of the meeting, New Elk owed $562,500 in throughput charges.

Cline has offered a one-time payment of $100,000 in exchange for an early termination of the lease and the settlement of all sums owed in connection with it, including any past due fees or future rent, PCC said.

The port commission urged the approval of the termination because it would make the land available for prospective new lessees. Details of the meeting are yet to be released.