Arch Reverses Position On Reclamation Obligations

Jun 27, 2016

In a reversal of its previous position, Arch Coal now says it would likely be able to obtain third-party insurance for its clean-up obligations in Wyoming, if necessary. 

Arch is currently allowed to self-bond its more than $400 million in reclamation obligations in the state, meaning it has promised to pay for future clean-up, but has not been asked to guarantee that promise with third-party insurance or cash. 

Arch has said previously that it would be financially untenable to replace those self-bonds with a third-party guarantee. But now, in documents filed with the bankruptcy court and first reported by the Casper Star-Tribune, Arch writes that if the company is required to replace those self-bonds, "the Debtors intend to obtain third-party financial assurances, such as commercial surety bonds or letters of credit, to fully secure their mine reclamation obligations in Wyoming."

The state has not said whether Arch or the other Powder River Basin coal companies currently in bankruptcy will need to replace their self-bonds if and when they reorganize. 

Cloud Peak Energy, the only one of the large Powder River Basin coal companies not currently in bankruptcy, is in the process of voluntarily replacing its self-bonds in Wyoming. Alpha Natural Resources has also said it will replace its self-bonds, if it emerges from bankruptcy. Peabody Energy, which is also in bankruptcy, has not presented a plan for dealing with its more than $700 million dollars in self-bonded clean-up obligations.