CHARLESTON, W.Va. – The West Virginia Department of Environmental Protection has entered into a consent order with Alpha Natural Resources Inc. related to the bankrupt coal company’s mine site reclamation obligations. In addition to requiring Alpha to continue to reduce the amount of self-bonding it has for mine site reclamation, the order provides an additional $39 million in financial assurances to back the company’s legal obligation to reclaim its West Virginia operations.
DEP Cabinet Secretary Randy C. Huffman calls the consent order “another important step in DEP’s efforts to protect the state from the significant changes taking place in the coal industry.”
“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,” said Secretary Huffman.
“Since the bankruptcy filing,” said Harold D. Ward, acting director of DEP’s Division of Mining and Reclamation, “Alpha has continued to reclaim its active and inactive operations in the Mountain State and has even stepped up those activities. DEP will continue to monitor Alpha’s operations closely to ensure that Alpha reclaims its approximately 500 West Virginia sites.”
The West Virginia Surface Coal Mining and Reclamation Act allows mining companies to “self-bond” reclamation obligations if they meet certain financial benchmarks. Alpha is the only self-bonded mining company operating in the state. Prior to the company’s bankruptcy filing, DEP required Alpha to begin transitioning to other forms of bonding.
Immediately after the filing, Alpha advised DEP that it no longer met the required financial requirements for self-bonding. DEP, accordingly, ordered Alpha to replace all of its self-bonding, which currently totals approximately $244 million, within 90 days. Alpha, however, responded that its bankruptcy filing prevented it from obtaining other forms of bonding.
The consent order obligates Alpha to continue to reduce its self-bonded obligations. This includes continuing to reclaim its active and inactive operations and possibly even selling or transferring self-bonded operations. Alpha also acknowledges its obligation to fully bond its remaining operations prior to exiting bankruptcy.
Under the order, Alpha will also provide an additional $39 million in financial commitments to back its remaining self-bonded reclamation obligations. Of that amount, $15 million will take the form of a letter of credit. Alpha, with the consent of its financial creditors, has also agreed to provide DEP with a “superpriority” claim in the bankruptcy case for the remaining $24 million in financial commitments.
The consent order is subject to bankruptcy court approval. Alpha has filed a motion seeking this approval and the court is scheduled to consider the motion later this month.
The consent order with Alpha follows DEP’s previously announced $50 million settlement with Patriot Coal Corporation. In the past two months, DEP’s efforts have secured nearly $90 million in financial commitments from bankrupt coal companies to reclaim their mining operations.
For more DEP news and information, go to www.dep.wv.gov. Also, be sure to connect with the agency on all social media platforms. Follow @DEPWV on Twitter and find us on YouTube by searching “Environment Matters.” For specific information about our REAP (Rehabilitation Environmental Action Plan), West Virginia Project WET (Water Education for Teachers), West Virginia Watershed Improvement Branch, Youth Environmental Program and Human Resources initiatives, connect on Facebook.