WY & Arch Coal Strike Deal On Cleanup Liabilities
Wyoming regulators and a bankrupt coal company have reached a resolution on the company's substantial outstanding coal mine cleanup costs.
Arch Coal declared bankruptcy with nearly half a billion dollars of future clean up costs still on its books. Documents filed with the bankruptcy court earlier this week indicate Wyoming regulators wanted financial assurances that the company would be able to pay those clean up costs.
But in those same documents, Arch says doing so would leave it with "woefully insufficient liquidity to operate their businesses," and "could entail significant expense." Arch also wrote that posting sufficient financial assurances would require more than 80% of their current liquidity.
The resolution? Arch Coal and the state have now struck a deal: $75 million, a fraction of the total, has been put aside for reclamation, plus an additional $17 million to cover four inactive mine sites. If the order is approved by the bankruptcy court, the state will be prohibited from taking any adverse action against the company, relative to its reclamation bonding obligations. Arch will be able to continue mining, even with the reduced clean up bonding.