CHEYENNE, Wyo. (AP) — The bankruptcy of yet another major coal company helps draws attention to plans for financially troubled coal companies to cover the potentially huge costs of filling and restoring to a natural state mines that sooner or later might permanently close amid the industry’s downturn.
St. Louis-based Peabody filed for Chapter 11 bankruptcy Wednesday. Peabody’s mines include the top-producing coal mine in the U.S., the huge North Antelope Rochelle mine in Wyoming’s Powder River Basin.
The mine produced 118 million tons in 2014, some 12 percent of production nationwide. So far, recent coal-mine closures have beset the industry in the east, not out west.
Bankruptcy reorganization doesn’t change Peabody’s commitment to ongoing reclamation as a routine part of surface mining or to ongoing talks with states and the federal government about long-term bonding obligations, spokeswoman Beth Sutton said.
“We see our land restoration as an essential part of the mining process, take great pride in the work that we do and have been routinely recognized for these programs,” Sutton said by email.
Advocacy groups, however, warn the recent bankruptcy of several companies including St. Louis-based Arch Coal and Bristol, Virginia-based Alpha Natural Resources could leave taxpayers responsible for billions in reclamation costs should a wave of coal-mine closures come to pass.
“Bankruptcy should never be used as a haven for a huge corporation to escape its obligations to clean up its mines,” Bob LeResche, chairman of the Powder River Basin Resource Council said in a statement.
A key issue is a practice called self-bonding. Self-bonding allows coal companies to open their books to regulators and promise to pay for mine cleanup in lieu of posting bond for mine reclamation up front.
Peabody alone has more than $1 billion in self-bonding obligations in Wyoming, Illinois, Indiana, Colorado and New Mexico. Almost three-quarters of that amount, $728 million, would cover Peabody’s three mines in Wyoming. Coal mine self-bonding among the top 12 coal-producing states tops $3 billion.
The Wyoming Department of Environmental Quality has reached bankruptcy-court agreements with Alpha Natural Resources and Arch that would ensure the state would get priority access to funds to cover those companies’ self-bonding obligations. The agreements would help Wyoming secure about 15 percent of Alpha Natural Resources’ $411 million and Arch Coal’s $486 million in self-bonding in the state.
Such agreements help ensure the companies remain on adequate footing to keep their mines open and continue routine reclamation work that’s far below the need for total reclamation, Wyoming officials say.
“We are reviewing the filing and will be having communication with the company,” Wyoming Department of Environmental Quality spokesman Keith Guille said Wednesday. “Wyoming residents have not had to pay for reclamation to date.”
The federal Office of Surface Mining Reclamation and Enforcement, meanwhile, has been reviewing coal self-bonding in Wyoming, Colorado, Utah, Indiana and Illinois in recent months.
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