Molly Moore | April 18, 2016 | No Comments
By Brian Sewell
Whether hurtling toward bankruptcy or crafting plans to reemerge, major U.S. coal companies are grappling with their liabilities to restore sites after mining and their obligations to employees, past and present.
Alpha Natural Resources, which entered bankruptcy in August 2015, recently filed a plan in federal court to restructure as a leaner company “positioned to meet new market realities.” If an effort to sell its most profitable assets goes as planned, Alpha claims it will be better able to focus on properly reclaiming its dozens of remaining mines — all of which are in central Appalachia.
But state and federal regulators are concerned that losing the cash flow from its “crown jewel assets” would leave Alpha a hobbled company unable to meet environmental cleanup requirements.
On March 28, Alpha’s lawyers asked a judge’s permission to break its contract with the United Mine Workers of America and remove an estimated $872 million in benefit obligations to union miners from its balance sheet. Two months before, Alpha was allowed to set aside nearly $12 million in bonuses for its top executives.
Similar to Alpha, Arch Coal approved $8.8 million in bonuses for executives in January, three days before it declared bankruptcy. The company has until May 13 to submit its own restructuring plan.
At press time, Peabody Energy, the world’s largest publicly traded coal company, was on the brink of bankruptcy with more than $1 billion in mine reclamation liabilities.
UPDATE: Peabody Energy filed for bankruptcy on April 13, 2016. Read more analysis on our Front Porch Blog.
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