Fear grows about health care benefits, pensions of Appalachian miners from bankrupt coal companies

Labor unions, citizen groups and regulators in financially troubled Appalachian coal regions fear that the downward spiral of the coal industry could lead coal companies "to try to abandon their obligations to fund miners’ pensions and health care benefits and try to escape from their commitments to reclaim mine sites and clean up polluted streams," Ken Ward reports for the Charleston Gazette-Mail.

"Last week, the United Mine Workers union warned that that is exactly what Patriot Coal hopes to do with its proposal to sell certain assets—those without large debts to union benefit funds or more significant long-term pollution liabilities—as part of a restructuring plan being considered in U.S. Bankruptcy Court," Ward writes. "UMW lawyers said the move would give the buyer, Kentucky-based Blackhawk Mining LLC, Patriot’s 'most valuable assets.' Left behind would be less-valuable properties, perhaps without the ability to fund 'significant and unwanted obligations' to reclaim land, pay injured workers, pay retirement and health care and employ miners working under a union contract, the lawyers said."

UMW lawyers said in a court filing opposing Patriot’s proposal: “The losers in this scheme would be the miners who generated profits over the years and the taxpayers of the state of West Virginia, the Commonwealth of Kentucky and the United States, who ultimately pay for the reclamation of the environment and the income replacement for injured and breathless miners."

Alpha Natural Resources, which last week filed for bankruptcy, "provided a long list of the sorts of 'legacy liabilities' that coal producers face: more than $680 million in reclamation obligations; $160 million in water-treatment costs; more than $158 million in black lung benefits; and $600 million of debt to the UMW’s pension plan," Ward writes. "In a vivid illustration of the liabilities that coal companies can leave behind, Alpha said reclamation and worker liabilities for 80 mines it has closed since 2011 already amount to more than $175 million a year."

"While Alpha officials have not yet announced their specific reorganization plans and said in court filings that they are 'not commencing an immediate sale process for their assets,' UMW President Cecil Roberts cautioned in a prepared statement issued the day of the bankruptcy filing that he expects an effort to 'pay off the big banks and other Wall Street investors at the expense of workers, retirees and their communities,'" Ward writes.