Struggling coal companies pressed to face cleanup costsReprints
(Reuters) — Struggling coal companies must face the costs of cleaning up their spent mines even as they get pushed toward bankruptcy, the U.S. Interior Secretary said on Tuesday.
The mining industry is responsible for restoring old mine sites but a taxpayer subsidy called "self bonding" has allowed some of the largest companies to forgo a large share of cleanup insurance.
Bankrupt Alpha Natural Resources and Arch Coal have sought to jettison cleanup liabilities in bankruptcy court and Interior Secretary Sally Jewell said officials will not tolerate such maneuvers.
"Even at a time of financial distress, it is still the responsibilities of these companies to do the reclamation that they signed up for," Jewell told lawmakers. Jewell was addressing the Senate Committee on Energy and Natural Resources.
"We need to make sure that those companies are held accountable."
Of the roughly $2 billion in future cleanup costs facing Peabody Energy Corp., $1.47 billion of that is self-bonded and has no concrete backing. Those costs could fall to taxpayers during bankruptcy.
Investors have lately worried whether a call to replace self-bonds with costly surety bonds could push struggling Peabody closer to bankruptcy.