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Nation’s Largest Coal Company Faces Lawsuit Over Failure to Guarantee Coal Mine Cleanups
Contact: Jeremy Nichols (303) 437-7663 jnichols@wildearthguardians.org

Denver—Citing thecoal giant’s financial woes and failures to comply with federal mining laws,WildEarth Guardians today put Peabody Energy on notice that the company faces afederal lawsuit if it doesn’t start paying to clean up its mines in theAmerican West.

“Peabody Energy is saddling Americans with enormous coalmine clean up costs,” said Jeremy Nichols, WildEarth Guardians’ Climate andEnergy Program Director. “Worse, as wepay, Peabody continues to destroy our climate.”

In a notice of intent to file suit sent today to PeabodyEnergy, the nation’s largest coal company and world’s largest private sectorcoal company, WildEarth Guardians highlighted how the company no longerqualifies for “self-bonding” at its mines in Colorado, New Mexico, andWyoming.

In the U.S., Peabody produces more than 180 million tons ofcoal annually. When burned, this coal produces more than 330 million metrictons of carbon dioxide annually, more than 5% of all U.S. greenhouse gas emissions.

By law, for a coal company to be permitted to mine, it mustfirst post bonds to cover the costs of reclamation. This ensures that if acompany becomes insolvent or goes out of business, the costs of cleaning up amine doesn’t fall upon taxpayers.

Normally, to meet bonding requirements, companies postsureties that are backed by third party guarantors. However, in some cases,companies are allowed to guarantee their own reclamation bonds and post what iscalled a “self-bond,” which is effectively a corporate IOU. Self-bonding isonly allowed where a company is solvent and meets certain financial criteria.

Although Peabody self-bonds mining operations in Colorado,New Mexico, and Wyoming, the company is on the verge of bankruptcy and nolonger meets legal criteria for self-bonding. The U.S. Department of the Interior has ordered the states of Colorado,New Mexico, and Wyoming to investigatewhether Peabody qualifies for self-bonding.

In total, Peabody guarantees more than $1.1 billion inself-bonds in the western U.S. Nationwide, Peabody guarantees more than $1.4billion in self-bonds. The company’s net worth, as reported at the end of 2015,is only $870 million.

“We’re bailing out bankrupt big coal,” said Nichols. “Thisis bad for our climate, bad for the American taxpayer, and bad for our westernpublic lands. It’s time for Peabody tostart keeping coal in the ground.”

By law, where a company no longer qualifies forself-bonding, it must post an alternate bond within 90 days or cease coalextraction. Guardians’ notice today threatens to file suit if Peabody does notpost an alternate bond.

Peabody Energy operates 12 mining operations in Colorado,New Mexico, and Wyoming. Its mines in Wyoming are the largest in the nation andinclude the North Antelope-Rochelle mine, which alone produces more than 10% ofall U.S. coal.

In Colorado, Peabody owns the Foidel Creek mine (also knownas the Twentymile mine) in northwest Colorado, as well as other miningoperations in the area that are undergoing reclamation. In New Mexico, Peabodyowns the El Segundo and Lee Ranch mines and is the state’s largest coalproducer.

Although Peabody has announced its intent to sell itsColorado and New Mexico assets, this transaction has yet to be finalized and itremains unclear whether the purchaser, Bowie Resources, willbe able to secure financing.

Under the U.S. Surface Mining Control andReclamation Act, citizens and citizens groups can file suit in federal court toenforce violations of the law. Beforefiling suit, citizens must provide 60-days notice of the violations. Today’s letter kicks off that 60 day period.