U.S. coal miner Peabody Energy Corp said on Monday it has agreed to set aside collateral to cover future mine cleanup costs as part of its bankruptcy reorganization plan, ending its controversial use of “self-bonds,” Reuters reported yesterday. For decades the largest U.S. coal companies have used a federal practice 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. Concerns over how Peabody, the world’s largest private-sector coal miner, would finance about $1 billion in self-bonds when it emerges from bankruptcy protection had led a series of complaints over its reorganization plan. Under a deal announced yesterday, Peabody said that it had arranged for $1.26 billion in third-party bonds and $14.5 million in a state bond pool in Indiana, one of the states where it held self-bonds, to fully satisfy its financing requirements.
