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Self-bonding by coal miners draws fire, praise at end of comment period

The comment period over the practice allowing coal companiesto self-bond ended on July 20 with a flurry of comments supporting andlambasting the controversial practice.

The U.S. Office of Surface Mining Reclamation andEnforcement announcedin May that it was opening a comment period on a petition to change regulationsthat allow coal companies to self-bond on reclamation obligations.

As coal companies are increasingly falling under and goingbankrupt, questions have arisen concerning whether or not they have theresources to meet their environmental reclamation obligations in the currenteconomic climate affecting the industry.

The Sierra Club said that more than 37,000 of their membersand supporters sent in comments to OSMRE to demand an end to the practice ofself-bonding.

"We're committed to making sure local families areprotected from irresponsible coal executives who are threatening to leavebehind dangerous, polluting mine sites that will plague communities forgenerations to come," said Mary Anne Hitt, director of the Sierra Club'sBeyond Coal Campaign, in a release. "Over the past three decades, coalcompanies have been playing fast and loose with our public lands and ourcommunities' pocket books by creating enormous clean-up liabilities withoutproviding any assurance that the money will be there to finish the job ofreclamation. OSMRE and DOI must protect our communities from this irresponsibleloophole and immediately issue guidance to stop the use of self-bonding by coalcompanies."

Self-bonding is about fairness, she continued. "If youdestroy the land, you clean it up. You don't walk away and leave it to yourneighbor," she said.

Luke Popovich, spokesperson for the National MiningAssociation, said that reclamationwas being done in an "exemplary way now" and that there has neverbeen a case in which a self-bonded company failed to meet its reclamationobligation. "The unavoidable conclusion is that this is yet another of manyefforts by this administration to keep coal in the ground by destroying thecoal industry and with it, its employment base and the communities it supports,"he said.

He said stateshave discretion under the Surface Mining Control and Reclamation Act to manageself-bonding.

"They'redoing that and they don't need [OSMRE] to muscle into this process," hetold S&P Global Market Intelligence. "Determining eligibility-basedbankruptcy proceeding is inappropriate since the purpose of the proceeding isto restructure a company so it emerges healthier. [OSMRE] and its activistallies would prejudge this outcome."

A representative from Cloud Peak Energy Inc. pointed tocomments made by CEOand President Colin Marshall in an April earnings call concerning the company'splan to move away from self-bonding. Marshall announced that the company wasnegotiating with surety providers to increase its third-party bonding and hadapplied to the Wyoming Department of Environmental Quality to decrease itsself-bonding obligations in the state.

The next step in this process is that OSMRE will decidewhether or not to pursue the rule-changing process on self-bonding.