The practice of self-bonding, or allowing coal companies a "pass" on setting aside funding for mine clean up, is coming back to haunt some states as the coal industry struggles.
"Colorado regulators say the state is changing its approach to ensuring coal mines get cleaned up," reports Leigh Paterson.
According to the article, the Colorado Department of Natural Resources is considering steps to "move away from self-bonding"—a policy by which coal companies are not required to set aside money for cleaning up mines in the future "if they can pass a test of financial strength."
"Even though many coal companies are struggling in a steep market downturn and some have even declared bankruptcy," explains Paterson, "many of them are still self-bonded. The problem? It's no longer clear whether those companies will actually be able to pay for future coal mine reclamation." Paterson cites the communications director at the Colorado Department of Natural Resources, Todd Hartman, in stating that the state is moving away from self-bonding, but additional details are still lacking.
As the coal industry struggles, the state of Colorado already has $100 million in future clean up costs sunk into self-bonds. That total accounts for 58 percent of the state's reclamation liability.
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