TORONTO (miningweekly.com) – US coal producer Peabody Energy reported that the Wyoming Department of Environmental Quality had notified it this week that three mine permits currently under renewal qualified for the state’s self-bonding programme.

Federal and state laws currently allowed certain financially robust companies to bypass obtaining surety bonds for a portion of the money required to secure payment of certain long-term obligations, including mine closure or reclamation costs, water treatment, federal and state workers’ compensation costs, obligations under federal coal leases and other miscellaneous obligations.

Peabody in a regulatory filing reported that its financial assurance for reclamation obligations as of March 31 was $2-billion, spread over various instruments. Its self-bonding obligations totalled $1.38-billion, with Wyoming accounting for $813.8-million, followed by New Mexico at $280.5-million, Indiana at $169.6-million, Illinois at $91.9-million and $27.1-million in Colorado.

US coal producer Alpha Natural Resources in May reported that it had been notified by the Wyoming Department of Environmental Quality's Land Quality Division (LQD) that the LQD believed the company no longer qualified under the ‘self-bonding’ programme in the state, under which Alpha avoided insurance or provisions of about $400-million to be used to clean up its mines upon closure.

According to the Wyoming Mining Association, Wyoming was home to nine of the top ten producing mines in the US and coal output provided the second largest source of tax revenue for the state and local governments, estimated at over $1.1-billion in 2013.

Peabody accounted for the present value of liabilities associated with final land restoration within its financial statements, which was about $760-million as of March 31.

The company provided financial assurance for its reclamation obligations through a mix of self-bonding, commercial surety bonds, bank guarantees and letters of credit.

Coal miners across the globe had been dealing with stubbornly low coal prices, a global supply glut and competition from cheap natural gas, which had forced cash-strapped miners to idle unprofitable mines and retrench thousands of miners. This had also raised the spectre of whether companies would be able to meet their mine closure obligations.