A judge in Richmond, VA approved coal giant Alpha Natural Resources’ plan to get out of bankruptcy Thursday. The approval went through, in part, because Alpha agreed to put up real financial assurances to cover future reclamation costs, which totaled hundreds of millions of dollars.
The terms of the settlement provide a managed route for the company to restructure and continue operating, while also taking responsibility for mine land reclamation as a result of former disturbances of private and federal lands,” a Department of the Interior representative wrote in a statement.
Alpha’s reclamation bonding and other environmental obligations had been a sticking pointthroughout its bankruptcy proceedings. Previously, Alpha had been allowed to self-bond which is basically a way of insuring future clean-up costs with nothing but a company’s own financial strength. Under the settlement, Alpha will have to replace those self bonds “with bonding in a form complying with the requirements.”
Alpha can now move forward with a key part of reorganization: selling its core assets to a new company called Contura, formed by a group of Alpha’s own lenders. Those core assets include mines in Wyoming, Virginia, West Virginia, and Pennsylvania, as well as the company’s share in a coal export terminal. Alpha is just one of a handful of major coal companies that have declared bankruptcy over the past year.