Blackjewel gets approval to drop millions in cleanup costs at dozens of coal mines on taxpayers; millions more likely within the year

Charleston, West Virginia -- This afternoon, a bankruptcy court issued a ruling that allows the Blackjewel coal company to immediately abandon cleanup obligations at 33 coal mines in Kentucky. An additional 171 Blackjewel permits in Kentucky, Tennessee, Virginia, and West Virginia will be placed into a legal limbo to potentially make them available to new ownership. Any of those permits that do not transfer to new owners in the next six months will also be abandoned.

Since Blackjewel failed to complete reclamation at these mines, and the regulators failed to require adequate reclamation bonds, these abandonments mean millions of dollars in outstanding costs may fall on taxpayers and local communities. Surety bond providers may choose to complete reclamation at some of the sites themselves, but it’s unlikely that the surety industry has enough money to properly reclaim the large number of permits that may ultimately be abandoned.

This is a potentially precedent-setting ruling at a time when several coal mining companies are nearing bankruptcy amid declining demand for thermal coal. 

The Surface Mining Control and Reclamation Act (SMCRA) of 1977 requires coal companies to complete reclamation, and to set aside money for future reclamation activity in case they go bankrupt. Today, there are potentially billions of dollars worth of unfunded coal mine reclamation work to complete in mining communities across the country. Completing all that work would employ thousands of workers -- including those that coal mining companies have laid off -- but many companies are ignoring those obligations, and after today’s ruling Blackjewel is allowed to shed that responsibility entirely.

Matthew Taylor, a Sierra Club member in Millstone, Kentucky: “Blackjewel failed dozens of communities across Kentucky by not hiring workers to clean up hundreds of coal mines, and now they’re allowed to just walk away. Only weeks ago, one of Blackjewel’s mines was severely eroding and leaching harmful pollutants that threatened the downhill community of Stoney Fork, and now Blackjewel is free of any responsibility at any of its mines that similarly endanger nearby communities.”

Peter Morgan, Senior Attorney at the Sierra Club: “Unfortunately, this is likely the start of a trend where bankrupt coal companies dump their coal mine cleanup obligations onto communities and taxpayers who simply don’t have the money to pick up the tab. Once a company is liquidating in bankruptcy, it’s too late to fully protect local communities and taxpayers. This should be a wake up call to state regulators across the country to immediately hold coal mining companies accountable and to put miners to work cleaning up coal mines before all the burden falls on taxpayers and underfunded surety bonds.”

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