Westmoreland's Reclamation Bonds: There Or Not There?

May 18, 2018

Map of Westmoreland's assets from its 10K filing
Credit Westmoreland Coal Company

The Western Organization of Resource Councils, WORC, believes a coal company that could soon face bankruptcy may not have sufficient funds to pay for mine clean-up costs. A spokeswoman for Westmoreland Coal Company said they are, however, in full compliance with bonding and reclamation regulations.

Beth Kaeding, chair of the Western Organization of Resource Council, said her organization dug through filings from Westmoreland to get more information on their reclamation numbers.

“Westmoreland has specifically stated how much it would cost to reclaim all their mines in a filing. And in another report, they have said how many reclamation bonds they have and the two numbers don’t match,” she said.

In the letter, WORC wrote the company estimated its coal mine cleanup costs at $772 million, but only have $672.9 million in bonds. But a Westmoreland spokeswoman said WORC is comparing two different things – that the $772 million is long-term clean-up costs, while the $672.9 million number references short-term coverage, over the next five years. The spokeswoman said the bonding amount is recalculated every five years. Kaeding responded saying the long-term number is the important one.

Westmoreland has mines in eight states including Wyoming and a mounting pile of debt - currently over a billion dollars. WORC sent the Office of Surface Mining a letter asking them to determine exactly where the $99 million shortfall was, “because if Westmoreland goes into bankruptcy, we want to be sure that the government participates so that Westmoreland is required, as under the law, to clean up all their mined properties and reclaim them,” Kaeding said.

The spokeswoman for Westmoreland added the company has an additional $510 million in cash collateral and debt securities to their surety bonds.