A Midwestern environmental group has followed through on its promise to formally challenge Peabody Energy's ability to guarantee it has enough money for future cleanup of its Illinois and Indiana coal mines.
The Environmental Law and Policy Center in Chicago on Friday asked state and federal regulators to stop allowing the St. Louis-based company to use the process known as self-bonding instead of posting conventional bonds for mine remediation.
Self-bonding allows Peabody to pledge that it has adequate assets to pay for the estimated $92 million needed to reclaim three southern Illinois mines once there's no coal left to extract, or if the company shuts down. Its remediation costs for six Indiana mines are estimated at $163 million.
The alternative is purchasing surety bonds from private insurers — an approach that the environmental group asked Illinois officials earlier this month to require of Peabody.
The formal complaint came one day after the company reported a $518 million loss in its fourth quarter of 2015 and annual losses of more than $2 billion.
In Wyoming, the environmental group WildEarth Guardians filed its own complaint last week challenging Peabody's self-bonding there and in other Rocky Mountain states. Groups also have raised concern about self-bonding for Wyoming mines operated by St. Louis-based Arch Coal and Bristol, Virginia-based Alpha Natural Resources, which both recently filed for Chapter 11 bankruptcy.
Peabody Energy president and CEO Glenn Kellow alluded to that "brutal industry backdrop" in the earnings report release.
But spokeswoman Beth Sutton said Sunday that the company "operates some of the safest, most productive and competitive mines in the nation" and noted that Indiana, Illinois, Wyoming and other states that allow it to self-bond approved the financing mechanism.