The Coal Company Formerly Known as Alpha Natural Resources Agrees to End Questionable Self-Bonding Scheme for Cleanup Costs
Casper Star Tribune:
Contura Energy will ditch its collateral bonds in favor of secure insurance to guarantee the cleanup of its Wyoming coal mines after local environmental advocates pushed for stricter accountability.
The clash of interests follows a long series of battles during the coal downturn. Coal companies, environmentalists and state and federal regulators frequently butted heads throughout the period of bankruptcies about the best way to guarantee environmental cleanup after mining.
The Bristol, Tennessee-based firm, a spinoff of Alpha Natural Resources, which declared bankruptcy in 2015, had $71 million in cleanup costs that it planned to collateralize with expensive equipment used at its Eagle Butte and Belle Ayr mines in Campbell County. Combined with traditional insurance and real estate, the bonding covered the full toll of Contura’s environmental obligations, close to $264 million in Wyoming.
“We had an understanding with [Wyoming Department of Environmental Quality] that Contura Coal West would, at some point in the future, replace its personal property collateralized bonds with third-party surety bonds,” the company said in a statement Monday. “This action represents the Company’s fulfillment of that commitment.”
The Powder River Basin Resource Council had protested the use of collateral, criticizing, among other things, the thoroughness of financial fitness statements Contura provided to state regulators when transferring mining permits from Alpha to Contura.
The company’s lawyers said in a letter to the Wyoming Department of Environmental Quality on April 6 that Contura would change its bonding for business reasons, noting that the change should ease the Powder River Basin Resource Council’s concerns.
Advocates had argued that collateral bonds were a potential risk to the taxpayer. If the company failed, it would leave the state of Wyoming to sell mining equipment, presumably during a downturn in the coal sector when the value and demand for that specialized equipment would have declined, they said.
While Contura replaces collateral bonds; advocates hope coal self-bonding on its deathbed