Who Will Clean Up If Indiana Coal Mines are Shuttered?
Friday, March 18, 2016
INDIANAPOLIS - Peabody Energy is the world's largest private-sector coal company, with customers in 25 countries on six continents. But it's now in financial trouble and has said in a filing with the U.S. Securities and Exchange Commission that it's likely to file soon for Chapter 11 bankruptcy.
Peabody's Indiana operation is based in Evansville, and Howard Learner, president and executive director of the Environmental Law and Policy Center, said one question is, who will clean up its six Indiana coal plants if they're shut down? Learner said the Indiana Department of Natural Resources let Peabody self-bond, which basically is a promise to pay for cleanup.
"There's a real possibility that unless Gov. (Mike) Pence and the Indiana Department of Natural Resources step up, Peabody will leave Indiana taxpayers holding the financial bag."
Learner said companies often buy third-party surety bonds that act as insurance policies to guarantee cleanup money is available when needed. Peabody self-bonded instead. Learner said that might have made sense five years ago when the company stock price was about $74 a share, but Peabody has since lost 99 percent of its market value.
At this point, the fate of the mines is uncertain. Peabody Energy said it has held discussions with lenders regarding potential debt-for-equity swaps or new financing. Learner said if the outcome is bankruptcy, anyone Peabody owes - including the state of Indiana - will be standing in line waiting for money.
"The solution here is for the Indiana Department of Natural Resources to do its job and do it well," he said, "namely require Peabody to put up real money or buy a bond so that it can comply with its environmental responsibilities to clean up and reclaim the land when the mines are shut down."
Peabody owns underground and surface mines throughout what's known as the Illinois Basin. The largest surface mine in the eastern United States is located in Sullivan County.
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