The bankrupt coal mining corporation Arch Coal has made a deal with Wyoming. In the deal, the company gained a temporary reprieve of having a multimillion dollar liability for the cost of cleaning up the coal mines.
It has been a practice of large mining companies like Arch Coal to use self-bonds to cover the expenses in cleaning up the coal mines. But lately, it has come under scrutiny because almost all giant coal companies like Alpha Natural Resources file bankruptcy leaving the citizens with billions of dollars in cleanup cost.
During the court arraignment, Arch Coal said that Wyoming and the Wyoming Department of Environmental Quality agreed to accept $75 million, which will finance the said operation. They added that this money will cover the cleanup of large mines like Coal Creek and Vanguard and additional $17 million will be used for the other four small mines that they are operating.
According to the settlement, Arch coal is still liable for the remaining cost of the cleanup. It is stated that the total amount will be $485.5 million and the company has only given a fraction of the cost. However, Arch Coal can only do this after emerging from bankruptcy. This is also the same settlement that the state of Wyoming and West Virginia forged with Alpha Natural Resources.
The Interior Department Office of Surface Mining and Reclamation Enforcement is now looking at this cases. If the department finds any irregularities regarding the management of the mine then it can assume power over the companies and take over the operations. It is still a question though why Wyoming officials allowed Alpha and Arc to decline the obligatory cleanup. Aside from Alpha and Arc, other major coal companies like Cloud Peak Energy Inc. and Peabody Energy Corp are also liable for engaging in self-bond agreements.
