Alpha, West Virginia resolve mine reclamation bond dispute

CHARLESTON, W.Va. (AP) — Coal operator Alpha Natural Resources and West Virginia regulators have agreed on a deal resolving a dispute over the company’s mine reclamation bonds.

Bristol, Virginia-based Alpha asked a bankruptcy court on Monday to approve a consent order with the West Virginia Department of Environmental Protection.

Alpha’s filing says the company issued self-bonds to cover more than $244 million in reclamation obligations. After Alpha filed for Chapter 11 bankruptcy in August, it told the DEP that it might no longer meet criteria for self-bonding. The agency ordered Alpha to replace the self bonds with other forms of bonding.

Under the consent order, Alpha agreed to reduce its self-bonded obligations and to continue reclaiming mining operations. Alpha also will provide $39 million in financial commitments to back its remaining self-bonded obligations.

“The consent order provides substantial additional financial assurance that Alpha will continue to perform its reclamation obligations in West Virginia, even as it considers its options to restructure its operations in bankruptcy,” DEP Secretary Randy Huffman said Tuesday in a news release.

Alpha’s filing said the company believes that the DEP does not have the authority under bankruptcy law to require it to post a commercial bond or collateral to cover the self-bonded obligations. But the company said it is not certain it would prevail if it litigated the dispute.

If the dispute is not resolved, the DEP likely would seek to revoke Alpha’s permits and not issue any new ones, which could create permitting issues in other states. Alpha has more than 500 mining permits for its operations in the state, the company’s filing said.

In October, the bankruptcy court approved an agreement between Alpha and Wyoming resolving a reclamation bonding dispute in that state. The agreement gave Wyoming priority access to $61 million in case either or both of Alpha’s two coal mines there closed and needed to be reclaimed.

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