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Coal Mine Cleanup Could Cost IL Taxpayers Millions

Environmentalists and the Illinois Attorney General are concerned that Peabody Energy won't be able to pay for cleanup at its coal mine sites in the state. (iStockphoto)
Environmentalists and the Illinois Attorney General are concerned that Peabody Energy won't be able to pay for cleanup at its coal mine sites in the state. (iStockphoto)
March 24, 2016

SPRINGFIELD, Ill. - One of the world's largest private coal companies is facing serious financial troubles.

Illinois environmentalists are concerned Peabody Energy won't be able to make good on its obligation to pay for cleanup of its coal mine sites in the state.

In a recent filing with the U.S. Securities and Exchange Commission, Peabody said it may soon file for Chapter 11 bankruptcy.

Howard Learner, executive director of the Environmental Law and Policy Center, says instead of setting aside the cleanup money, Peabody has self-bonded, which is essentially a promise to pay.

"Peabody's promise to pay runs the risk at this point of Illinois taxpayers being forced to take on the financial risk that is supposed to be Peabody's responsibility," says Learner.

This week, Attorney General Lisa Madigan asked the company to publicly release financial records to prove it has the required $92 million to reclaim the Illinois mine sites if they're shuttered.

Bankruptcy is only one option for Peabody Energy, so the fate of the company's Illinois mines is still open.

According to Learner, companies typically buy what are called surety bonds to guarantee funds will be available for cleanup costs.

Peabody, however, chose to self bond several years ago when its stock price was about $74 a share. Learner says now, with the possible bankruptcy, that approach no longer makes sense.

"So, both the Environmental Law and Policy Center and a number of other parties are calling upon the Illinois Department of Natural Resources and Gov. Bruce Rauner to step in, and require Peabody to put real money behind its promise to do its mine reclamation responsibilities and mine cleanups in the future," says Learner.

The DNR says it will review Peabody's self-bonding after it receives financial statements from the company, which are due at the end of the month.

Brandon Campbell, Public News Service - IL