Beleaguered mining firm Alpha Natural Resources, Inc. has reached a settlement with West Virginia over clean up and reclamation commitments.
West Virginia’s Department of Environmental Protection (DEP) announced that the agency will drop opposition to Alpha’s bankruptcy plan, in return for more than $300 million in clean up commitments.
Specifically under the agreement, profits from the continued operations of various mining sites will support clean-up efforts. According to court papers, Alpha will shoulder around $300 million of reclamation obligations through its retained mines, while creditors’ mines will take up almost $200 million of the clean-up duties.
In addition, Alpha and secured creditors have committed to fund $200 million worth of reclamation and water treatment work over the next five to 10 years.
Still, the agreement must pass in bankruptcy court, although DEP said the settlement already has the support of Alpha’s committee of creditors.
Alpha is under pressure to reach an agreement with federal regulators and other states that are worried that taxpayers will foot the bill for the clean-up of contamination due to its mining operations.
The company is one of the many coal companies that sought Chapter 11 protection after it went bankrupt due to insupportable debt loads resulting from falling coal prices.
