EQC Approves Revised Self-Bonding Rules To Reduce Risk

Feb 21, 2019

Cordero Rojo Mine Reclamation
Credit Wyoming Mining Association

Wyoming's Environmental Quality Council has approved Department of Environmental Quality updates to how companies guarantee reclamation costs. If signed by the Governor, the decision would limit mining companies' access to self-bonding; that's essentially an IOU to pay reclamation costs, rather than a financial guarantee.

Bob LeResche, vice chair of the Powder River Basin Resource Council, said it's a risky method. Its weaknesses were amplified when three major coal companies went bankrupt several years ago, with reclamation payments at risk. LeResche said the modernized rules, if passed, will help ensure land from coal mines actually gets returned to their original state.

"I think it certainly protects the taxpayers against the increasing potential that reclamation might not be funded sometime in the future," LeResche said, adding Wyoming now has the strongest self-bonding rules in the country.

DEQ's Keith Guille said proposed regulations use a new method to determine financial health so a struggling company doesn't end up too self-bonded.

"Now, what we went to is to credit ratings, and so credit ratings will now give us an idea of where they stand now in their financials to be able to do that test and whether or not they can qualify for a self-bond," Guille said.

DEQ's Land Quality Division has been in the process of updating the regulations since 2015. Its administrator, Kyle Wendtland, said in a statement the changes would ultimately reduce reclamation liability risk. It could take up to two and half months for the Governor to consider the updates.