WASHINGTON, March 21 The Illinois attorney
general has asked Peabody Energy Corp in a letter to
explain how it would cover $92 million in future cleanup costs
in the state if the company sought bankruptcy protection.
Peabody , the country's largest coal producer, said in a
regulatory filing last week that it may have to seek bankruptcy
protection, citing poor economies in countries that import coal
and other factors weighing on the coal industry. [nL3N16O4CV}
In an emailed statement, Peabody declined to comment on the
specifics of the letter but said, "We see our land restoration
as an essential part of the mining process, and take great pride
in the work that we do."
If the company did seek bankruptcy protection, a judge would
decide how to prioritize liabilities like $92 million in future
cleanup costs in Illinois that are not guaranteed by cash, bonds
or other securities.
Large coal companies like Peabody have been allowed to leave
a share of future mine cleanup without collateral through a
program called 'self bonding' that is now under federal review.
"I have significant concerns about Peabody's ability to
fulfill its self-bonding obligations," Attorney General Lisa
Madigan wrote in the letter to Peabody that was seen by Reuters
Madigan, the state's chief lawyer and a Democrat, asked
Peabody to "publicly disclose financial information" that
underpins its application to self bond in the state.
The Illinois Department of Natural Resources answers to the
state's Republican governor Bruce Rauner. A spokesman for the
agency did not immediately respond to a request for comment.
The coal industry is struggling with competition from
natural gas, a weak export market and clean-air regulations and
two of Peabody's peers, Alpha Natural Resources and Arch Coal,
have filed for bankruptcy in recent months.
Interior Secretary Sally Jewell has said that taxpayers
could face a $3.6 billion bill if self-bonded coal companies
(Reporting By Patrick Rucker)