Peabody Energy Corp. failed to explain how it will cover future mine cleanup costs in a reorganization plan filed on Thursday, triggering concerns over the company's use of "self-bonds,” Reuters reported on Friday. Under a federal program called "self-bonding," large miners like Peabody have been allowed to extract coal without setting aside cash or collateral to ensure mined land is returned to its natural setting, as required by law. The practice came under scrutiny following bankruptcy filings by some of the largest U.S. coal miners because, without collateral set aside for mine reclamation, taxpayers are potentially exposed to billions of dollars in cleanup costs. Environmental groups have been following the bankruptcy to see whether Peabody, the world's largest private-sector coal producer, replaces roughly $1 billion of self-bonds with other guarantees, as rival Arch Coal Inc. did in its October bankruptcy reorganization. In its plan to eliminate over $5 billion of debt to emerge from chapter 11, Peabody said it will address its "self-bonding reclamation obligations in accordance with applicable laws and regulations," without providing details.
