DEP and Patriot reach reclamation agreement

CHARLESTON, W.Va. — Patriot Coal and the West Virginia Department of Environmental Protection have worked out an arrangement which is very different from the legacy of past coal company bankruptcies.

The agreement, which is pending approval of a federal bankruptcy judge, creates a pool of $50 Million funded by Patriot and the two prospective buyers of the bankrupt company, Blackhawk Mining and the Virginia Conservation Land Trust. The fund will be earmarked for Patriot’s reclamation obligations.

“As Patriot is split up and some operations continue and some don’t, the DEP’s main responsiblity is that we get reclamation done,” said DEP Secretary Randy Huffman.

However, Huffman said the arrangment is unique because it would not only cover the cost of reclamation, but the bonds secured in the mining permits will also continue to be covered.

“Over and above that, the bonding is going to be maintained,” Huffman said. “We think we’ve got a deal that provides for that reclamation to be done, but also keeps as many people working as possible. That’s a win-win for everyone.”

Historically when a company went bankrupt, they disappeared off the West Virginia landscape and the state was left holding the bag for the company’s liabilities. Taxpayers often had to foot the bill for cleaning up the mess. Typically the way the situation was handled was to raise the tax on coal. But Huffman said now is not the time to be considering more taxes on coal. This arrangement represents a new way of thinking at the DEP according to Huffman.

“That’s a last resort and I think historically it was considered a first resort,” Huffman said. “We’ve changed our way of thinking as a state on that. It’s led us to be in a bettter position to make deals.”

Huffman said through the deal, the Virginia Conservation Land Trust has committed to keeping Patriot’s Federal #2 mine open and running and has also indicated plans to use former Patriot employees to handle a lot of the reclamation work.

The deal is now pending the bankruptcy judge’s approval along with the plan to sell off Patriot’s assets to Blackhawk and VCLF.





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