Appalachian History Series – Blue Diamond Coal Company: From First Creek to Scotia and Stearns
On a March morning in 1976, the name Blue Diamond Coal Company suddenly appeared in headlines far from the mountains. Two methane explosions at the Scotia Mine in Letcher County killed twenty six men over the course of three days and put a relatively quiet Knoxville based coal firm under a national spotlight. For many readers Scotia was the first time they had heard of Blue Diamond. For miners and families in Perry, Harlan, McCreary, and across the central coalfield, the company had already shaped daily life for more than half a century.
The story of Blue Diamond begins long before Scotia, in the years when the hills around Hazard were being surveyed, leased, and mapped as a new industrial frontier. It runs through company camps along First Creek, Chevrolet, Coxton, and Leatherwood; through land deals and mine scrip; through battles over union recognition at Stearns; and finally through a series of court cases and congressional hearings that turned a rural disaster into a test of mine safety law and corporate responsibility.
First leases and a new coal town on First Creek
Blue Diamond’s paper trail begins in the 1910s, when outside capital was moving into the upper Kentucky River. Kentucky River Coal Corporation, a major landholding firm, records its first coal lease in August 1915 to a new operating concern, the Blue Diamond Coal Company. The lease covered property near Hazard, and KRCC notes that Blue Diamond “began production shortly thereafter” and remained one of its working lessees into the twenty first century.
Family and oral histories fill in the faces behind that corporate name. In an interview recorded by the University of Tennessee’s Center for the Study of War and Society, G. Gordon Bonnyman remembered that his father, Alexander “Sandy” Bonnyman Sr., helped organize and promote an early Blue Diamond mine near Hazard before the First World War. The Bonnyman family would later control the Knoxville based company, and the younger Bonnyman worked for Blue Diamond himself before joining the Marines and earning the Medal of Honor at Tarawa.
The mine at First Creek quickly became a coal camp large enough to be marked on federal maps and in Works Progress Administration surveys. A 1936 WPA “General History” of Perry County estimated that the unincorporated community of Blue Diamond, clustered around the company operation near Hazard, had a population of roughly two thousand in the 1930s. Workers and their families lived in rows of company owned houses that followed the narrow bottomland and the rail spur; almost every job, house, and purchase was linked to the mine.
By the late 1930s Blue Diamond promoted itself through carefully prepared images. The Kentucky Historical Society holds photograph albums from around 1937 that show Blue Diamond mines and camps in the Cumberland region. The prints take the viewer on a tour of tipples, shafts, boarding houses, and company stores in places like Perry and Harlan counties, each image captioned and numbered for investors and visitors. These albums were meant to reassure outsiders that Blue Diamond owned modern plants and orderly communities. For miners, they preserved a snapshot of a world that was tightly organized around production.
Chevrolet, Coxton, and the Crown Mine
As the company expanded, it followed coal seams into nearby Harlan County. At Chevrolet and Coxton, Blue Diamond operated the Crown Mine along the Clover Fork of the Cumberland River. Housing survey photographs from the 1940s show House No. 12 and street scenes in the Chevrolet and Coxton camps: small frame houses built close together, front porches facing dirt streets, tipple structures rising just beyond the last row of yards.
These communities functioned as classic southeastern Kentucky coal towns. Blue Diamond owned the houses and utilities, supplied the store, and used the camp layout to keep workers close to the mine. Later genealogical compilations of “Coal Mines in Harlan County” list Blue Diamond operations such as the Crown and No. 12 mines, along with the dates and fatal accidents associated with them, providing a stark counterpoint to the company’s polished promotional photographs.
Other Blue Diamond operations tied the company to a wider Appalachian geography. Company histories and local accounts note Blue Diamond mines at Leatherwood in Perry County, in the Royal Blue camp of Campbell County, Tennessee, and at Inman in Wise County, Virginia, where a southwest Virginia pamphlet on early commercial mines lists Blue Diamond among the operators. By mid century, workers who “worked for Blue Diamond” might be talking about a camp near Hazard, a deep mine on Clover Fork, a hollow at Leatherwood, or even a job across the state line.
Scrip, stores, and controlled wages
If the photographs show what the camps looked like, mine scrip shows how they worked. The Arthur Kilgore Mine Scrip Collection at Morehead State University includes tokens issued by Blue Diamond Coal Company in denominations of five cents and one dollar, used at camps such as Chevrolet. The accompanying notes describe Blue Diamond as founded in Chevrolet in 1918 and later headquartered in Knoxville, Tennessee.
Like other firms in the region, Blue Diamond used scrip as an advance on wages and as a way to tie miners to the company store. Workers could spend the tokens on groceries or clothing in a commissary that was often the best stocked, and sometimes the only, store in practical reach. Historians of coal labor have pointed out that this practice shifted risk and debt onto miners. If a miner was docked for medical bills, rent, or “short” cars, he might find his cash wages gone and only scrip left to carry a family until the next pay.
Oral histories from the Nunn Center’s “Appalachia: Coal Operators” project and from Eastern Kentucky University’s collections add the voices of both managers and miners to that picture. Operators describing Blue Diamond mines talk about the company as a “multi unit” enterprise that used a central Knoxville office to control payroll, sales, and safety decisions at its scattered subsidiaries. Miners and their families remember how credit at the company store, the availability of work, and the threat of eviction from camp housing shaped their choices about organizing and protest.
Land, leases, and corporate power
Blue Diamond was never the largest operator in eastern Kentucky, but land studies and camp databases show it as part of a tight cluster of corporate players that dominated mineral ownership. The “Patterns of Corporate Land Ownership in Eastern Kentucky” study, completed in the early 1980s, mapped out how a relatively small number of firms controlled huge swaths of land and mineral rights in the central Appalachian coalfield. Blue Diamond appears in that report as one of the companies whose primary business was mining, layered atop landholding corporations like Kentucky River Coal.
A coal camp database compiled at CoalEducation.org, drawing on state records and archival material, lists Blue Diamond Coal Corporation among the operators that built and ran dozens of company towns across the Commonwealth. The study of corporate landholding and camp development makes clear that when a family moved into a Blue Diamond town they were stepping into a landscape already engineered by outside companies. Rail lines, tipple locations, even school sites and recreation halls reflected corporate decisions made in Knoxville and in land offices far from the branch they lived on.
Scotia: explosions, widows, and a public reckoning
The best known chapter in Blue Diamond’s story begins at a mine that did not carry its name. Scotia Mine No. 1, near Oven Fork in Letcher County, was operated by Scotia Coal Company, a wholly owned subsidiary of Blue Diamond. On March 9, 1976, a methane explosion ripped through the underground workings, killing fifteen miners. On March 11, as federal and company officials tried to resume rescue operations, a second explosion killed eleven more men, including federal mine inspectors.
The official Mine Safety and Health Administration report, “Report of Investigation, Underground Coal Mine Explosions, Scotia Mine, ID No. 15 02055,” traces the disaster to accumulated methane, inadequate ventilation, and electrical equipment that ignited gas in a dead end entry. It details a pattern of earlier violations, the placement of fans and regulators, and the repeated failure to control explosive mixtures.
The explosions prompted congressional hearings and a staff report by the House Committee on Education and Labor titled “Scotia Coal Mine Disaster, March 9 and 11, 1976.” Lawmakers questioned Blue Diamond executives and federal inspectors about why the mine had remained open despite warnings and prior citations. They criticized both corporate practices and gaps in enforcement, using Scotia as evidence that existing law did not go far enough to protect miners.
Families of the dead refused to let the mine or the company fade into anonymity. Fifteen Scotia widows filed a wrongful death lawsuit, Boggs v. Blue Diamond Coal Co., against the parent corporation. The case argued that Blue Diamond, not just its Scotia subsidiary, bore responsibility for the ventilation and safety decisions that led to the explosions. In 1979 the Sixth Circuit Court of Appeals held that Blue Diamond could not claim immunity as an “employer” under Kentucky’s workers’ compensation system and could be sued for its own negligence toward miners employed by its subsidiary.
Other legal battles turned Scotia into a test case for regulatory power. In United States v. Blue Diamond Coal Co.; Scotia Coal Co., the government defended the warrantless seizure of mine records from Scotia’s office during the rescue and investigation. The Sixth Circuit upheld the seizure, emphasizing the heavily regulated nature of the coal industry and the statutory requirement that such records be available for inspection.
Outside the courtroom, the Council of the Southern Mountains, based at Berea College, kept detailed files on Scotia, from phone logs with widows and attorneys to statements on the mine disasters. Those records, along with personal interviews collected for Gerald M. Stern’s book The Scotia Widows, preserve a near real time account of how families interpreted Blue Diamond’s response and how they used the courts to push for accountability.
Today a Kentucky historical marker at the Scotia site in Letcher County summarizes the disaster and notes that many widows of the miners sued Blue Diamond, highlighting Scotia as both a local tragedy and a turning point in coal mine safety.
“No contract, no coal”: Blue Diamond at Stearns
Within months of the Scotia explosions, Blue Diamond’s name was at the center of another struggle, this time above ground. In 1976 the company purchased the Justus mine at Stearns in McCreary County from the Stearns Coal and Lumber Company. Nineteen seventy six is the same year that miners at Justus voted to replace a company friendly association with a United Mine Workers of America local, demanding a contract that included a union safety committee.
When Blue Diamond refused to sign a standard UMWA agreement, the miners walked out. The resulting strike, which lasted from 1976 into 1979, is documented in Eastern Kentucky University’s Blue Diamond/Stearns Coal Mining Strike Oral History Project. Interviews with miners such as Bill Reynolds and with executives like Frank Thomas describe picket lines, nighttime gunfire, injunctions limiting the number of picketers, and an extended campaign to force union recognition at a mine whose owner already had a reputation for fighting union power.
Contemporary radical and labor press accounts depicted Stearns as a symbol of a broader national struggle. Articles on the strike in Trotskyist and socialist newspapers emphasized the hiring of armed guards, the use of helicopters to move “goons,” and the willingness of miners and their families to endure years without steady pay in order to secure a union contract and enforceable safety rights.
The Justus miners’ slogan, “No contract, no coal,” echoed a widely shared lesson of Scotia. Without a binding agreement and real safety enforcement, miners believed they were being asked to risk their lives for someone else’s profit. The Stearns strike did not erase nonunion mining in the region, but the oral histories and support committee records show how one Blue Diamond conflict fed into a wider story of coalfield militancy in the late 1970s.
Leatherwood, black water, and environmental enforcement
Blue Diamond’s impact on surrounding communities did not end at the mine mouth. In the late 1970s, newspapers such as the Floyd County Times reported state fines against the company’s Leatherwood operation in Perry County for black water and coal fine discharges that polluted streams.
Later local narratives, like Milton Smith’s detailed essay on what he calls the “Perry County coalfield wars,” tie Blue Diamond’s Leatherwood mine to episodes of violence, strike breaking, and armed confrontation in the 1960s and 1970s. Although Smith’s account is a secondary source and written decades later, it points researchers to specific dates, roads, and names that can be checked against court filings and contemporary newspaper coverage.
Taken together with land ownership studies and camp records, these environmental and labor disputes show how a company that began as one more lease holder near Hazard grew into a regional power that shaped streams, roads, and local politics as well as employment.
What remains of Blue Diamond’s world
Coal production in eastern Kentucky has fallen sharply since Blue Diamond’s early years, and the company has spent much of the last three decades fighting over legacy obligations rather than opening new camps. In the 1990s and 2000s Blue Diamond appeared in federal court again, this time as a plaintiff challenging the Coal Industry Retiree Health Benefit Act and its premiums for retired miners’ health care. Cases like In re Blue Diamond Coal Co. and Blue Diamond Coal Co. v. Trustees of the UMWA Combined Benefit Fund turned on constitutional arguments over takings and retroactive liability rather than on underground explosions or picket line clashes.
On the ground, pieces of the company’s landscape still stand. The former camps at Blue Diamond, Chevrolet, and Coxton have lost many of their original houses, but the basic layout of tipple sites, rail beds, and rows of company lots is still visible to anyone who knows what to look for. At Stearns and in the Big South Fork National River and Recreation Area, preservation reports describe the remains of the Justus mine and interpret the evolution of the coal economy from company town to heritage tourism.
For families whose lives were tied to Blue Diamond wages, memories of that world survive in photo albums, in Facebook groups that share images of Hazard and First Creek in the 1950s, and in oral histories where former residents recall baseball games, church services, and nightly whistles. Local history scrapbooks such as “Hazard, Heart of the Coal Fields” at Pine Mountain Settlement School gather clippings and notes on Blue Diamond operations, giving a sense of how the company’s presence shaped both the economy and the identity of Perry County.
For the Scotia families, the company’s name will always be tied to a hillside cemetery in Letcher County and to the courtroom fights that followed. For the Stearns miners, it will always be bound up with long months on the picket line and the insistence that miners deserve a say in the conditions they work under.
For historians, Blue Diamond Coal Company is a way to trace the connections between land companies, operating firms, camps, and communities across central Appalachia. Its records, court cases, and photographs show how decisions made in a Knoxville office or a New York boardroom played out on specific creeks and ridges, and how miners and their families responded when those decisions proved deadly.
Sources & Further Reading
Blue Diamond Coal Company. Blue Diamond Coal Company Photograph Albums, circa 1937. Kentucky Historical Society, Frankfort, KY. Accessed January 15, 2026. https://researchworks.oclc.org/archivegrid/archiveComponent/967777591.
Pine Mountain Settlement School. “Local History Scrapbook: Hazard, Heart of the Coal Fields 1919.” Pine Mountain Settlement School Archives. Accessed January 15, 2026. https://pinemountainsettlement.net/scrapbooks-albums-gathered-notes/scrapbooks-guide/local-history-scrapbook-guide-1920-1980/hazard-heart-of-the-coal-fields/.
Kentucky River Properties LLC. “History.” Kentucky River Properties. Accessed January 15, 2026. https://krpky.com/company/history/.
Kilgore, Arthur. “Arthur Kilgore Mine Scrip Collection.” Library and Archives, Morehead State University. Finding aid, 1995. Accessed January 15, 2026. https://scholarworks.moreheadstate.edu/kilgore_scrip_collection/.
Kilgore, Arthur. “Arthur Kilgore Mine Scrip Collection.” Yale Energy History. Accessed January 15, 2026. https://energyhistory.yale.edu/arthur-kilgore-mine-scrip-collection/.
Kentucky Coal Education. “Eastern Kentucky Coal Field – Perry County.” Kentucky Coal Education. Accessed January 15, 2026. https://www.coaleducation.org/coalhistory/coaltowns/perry.htm.
Goode, William P. “Introduction to Coal Camp Database.” Kentucky Coal Education, 1996. Accessed January 15, 2026. http://www.coaleducation.org/coalhistory/coaltowns/introduction_to_coal_camp.htm.
Louie B. Nunn Center for Oral History. “Appalachia: Coal Operators Oral History Project.” University of Kentucky Libraries. Accessed January 15, 2026. https://kentuckyoralhistory.org/ark%3A/16417/xt7gms3k0n5n.
Eastern Kentucky University. “Blue Diamond/Stearns Coal Mining Strike Oral History Project.” William H. Berge Oral History Center, Eastern Kentucky University. Accessed January 15, 2026. https://oralhistory.eku.edu/collections/show/57.
U.S. House of Representatives, Committee on Education and Labor. Scotia Coal Mine Disaster, March 9 and 11, 1976: A Staff Report. 94th Cong., 2d sess. Washington, DC: U.S. Government Printing Office, 1976. https://www.govinfo.gov/content/pkg/CPRT-94HPRT77245/pdf/CPRT-94HPRT77245.pdf.
Kentucky Historical Society. “Scotia Mine Disaster.” ExploreKYHistory. Accessed January 15, 2026. https://explorekyhistory.ky.gov/items/show/238.
Dinger, John S., et al. Assessing Water-Supply Potential of Abandoned Underground Coal Mines in Eastern Kentucky. Report of Investigations 12, Series 12. Lexington: Kentucky Geological Survey, University of Kentucky, 2001. https://kgs.uky.edu/kgsweb/olops/pub/kgs/ri12_12.pdf.
Lowe, Robert E. “Blue Diamond Coal Mine.” CSX Transportation Historical Society Journal 7, no. 3 (2019). https://www.csxthsociety.org/journal/v07-2018/v07n3/csxtjournalv07n3-20190401-bluediamondcoalmine-footerr.pdf.
Appalachian Land Ownership Task Force. Land Ownership Patterns and Their Impacts on Appalachian Communities: A Survey of 80 Counties. Washington, DC: Appalachian Regional Commission, 1983. https://files.eric.ed.gov/fulltext/ED216895.pdf.
Berea College Special Collections and Archives. “Council of the Southern Mountains Records.” Berea College, Berea, KY. Accessed January 15, 2026. https://berea.libraryhost.com/index.php?p=collections/controlcard&id=30.
Wall, Pat. “Striking U.S. Miners Fight Hired Guns.” Socialist Worker, August 26, 1977. Reprinted at Marxists Internet Archive. Accessed January 15, 2026. https://www.marxists.org/history/etol/writers/wall/1977/08/usminers.html.
Stearns Miners Support Committee. “Support the Stearns Strikers!” Pamphlet, ca. 1977. Unity Archive Project. Accessed January 15, 2026. https://unityarchiveproject.org/wp-content/uploads/Support-the-Stearns-Strikers.pdf.
Smithsonian American Art Museum. “The Blue Diamond Mines, Leatherwood, KY (Robert K. Hower, 1975).” Smithsonian American Art Museum Collections. Accessed January 15, 2026. https://americanart.si.edu/artwork/blue-diamond-mines-leatherwood-ky-10831.
Pine Mountain Settlement School. “Scrapbooks Guide.” Pine Mountain Settlement School Archives. Accessed January 15, 2026. https://pinemountainsettlement.net/scrapbooks-albums-gathered-notes/scrapbooks-guide/.
“‘They Made Their Money on the Big Chunks of Coal.’” AppalachianHistory.net, May 2019. Accessed January 15, 2026. https://www.appalachianhistory.net/2019/05/they-made-their-money-on-big-chunks-of.html.
WSGS (Hazard, Kentucky). “WSGS History: It Was Break Time at the Blue Diamond Coal Camp on First Creek in Perry County about 1941.” Facebook post, July 3, 2021. Accessed January 15, 2026. https://www.facebook.com/100058506286437/posts/4259852630771210/.
Blackhawk Mining, LLC. “Blackhawk Mining Fact Sheet.” Blackhawk Mining, April 2019. Accessed January 15, 2026. https://blackhawkmining.com/wp-content/uploads/2023/04/BlackHawk_Factsheet_3-30.pdf.
Baker, John A. Public and Industrial Water Supplies of the Eastern Coal Field Region, Kentucky. U.S. Geological Survey Circular 369. Washington, DC: U.S. Government Printing Office, 1956. https://pubs.usgs.gov/circ/1956/0369/report.pdf.
Kentucky Genealogical Society. “Tracing Your Kentucky Coal Mining Ancestors.” Kentucky Genealogical Society. Accessed January 15, 2026. https://kygs.org/eastern-ky-coal-mining-records/.
University of Kentucky Libraries. “Kentuckians, Organize!: 100 Years of Kentucky Labor History.” University of Kentucky Libraries News. Accessed January 15, 2026. https://libraries.uky.edu/news/kentuckians-organize-100-years-kentucky-labor-history.
Author Note: As someone who grew up in the central Appalachian coalfield, I have heard Blue Diamond stories my whole life. I hope this piece gives you a clearer sense of how one company’s decisions reached from Knoxville boardrooms into Perry, Harlan, Letcher, and McCreary County kitchens and mine portals.