U.S. coal miner Arch Coal has agreed to set aside collateral to cover future mine cleanup costs as part of its bankruptcy reorganization plan, according to a court filing, ending its controversial use of "self-bonds,” Reuters reported yesterday. For decades the largest U.S. coal companies have used a federal subsidy known as "self-bonding," which exempts companies from posting bonds or other securities to cover the cost of returning mined land to its natural state, as required by law. Arch had $485.5 million in self-bonds in Wyoming when it filed for bankruptcy protection in January, saddled with $6 billion of debt and a deep slump in the coal sector. Under a reorganization plan set for a confirmation trial today in U.S. Bankruptcy Court in St. Louis, Arch must replace all of its self-bonds within 15 days of its bankruptcy exit plan becoming effective, a court filing by the company showed on Sunday.
