Coal company bankruptcies jeopardize reclamation

Thirty-some years ago, before mining companies turned Wyoming’s Powder River Basin into the nation’s most productive coal region, they made a promise: When they finished extracting coal, they would restore the land.

Under federal law, companies must reclaim the land they’ve mined. To ensure that cleanup is completed, they must provide financial guarantees — bonds, cash or collateral to cover the entire cost of reclamation. That way, even if the company goes out of business, the public is protected from expensive cleanup bills or abandoned mines that scar the land, pollute waterways and eliminate rangeland and wildlife habitat. These days, for a big mine, reclamation costs can reach several hundred million dollars.

Instead of setting aside cash or getting a financial institution to guarantee that land will be reclaimed, though, several of the biggest coal companies took advantage of a provision of the Surface Mining Control and Reclamation Act of 1977 that allows them to self-bond. That means companies with adequate finances can make legally binding promises they’ll cover reclamation costs. The companies benefit because they avoid tying up their money or spending it on surety bonds.

But recently, after decades as industry stalwarts, some of those companies have seen their finances nosedive, and fears about whether they will be able to meet their growing financial obligations to restore the land have reached a crescendo.

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