CMA Statement on Arch Coal Chapter 11 Filing – State’s Most Productive Coal Mine Will Keep Operating
Arch Coal’s Chapter 11 filing will have no immediate impact on operations or shipments of coal from the West Elk Mine near Somerset, Colorado, according to the attached news release. Therein, Arch states its belief that “it has sufficient liquidity to continue its normal mining activities and to meet its obligations in the ordinary course. Arch had more than $600 million in cash and short-term investments as of January 11, 2016, and expects to receive $275 million in debtor-in-possession (DIP) financing.” This will provide a cash cushion to facilitate restructuring of the company’s operations and finances, the company adds.
“As far as Colorado is concerned,” said Stuart Sanderson, CMA President, “there is another silver lining. The West Elk Mine is the state’s most productive coal mine, having mined more than 5 million tons in Colorado in 2015.” The company has won both state and national acclaim for its commitment to environmental protection and to the safety of its work force (zero injuries and zero fatalities through October 2015). In fact, the West Elk Mine has been recognized as the safest underground coal mine in Colorado and in the United States, among other honors it has received over the years.
As Sanderson told the Denver Post, while the industry faces serious challenges, “rumors of coal’s demise are greatly exaggerated.” Colorado coal producers mined more than 21 million tons of clean, high quality coal that is the fuel of choice for utilities in meeting the stringent requirements of the Clean Air Act. He strongly disputed the Denver Post’s and Bloomberg News characterization of coal’s environmental record in a recent article, noting that while coal use increased over a 30 year period , emissions have declined by more than 90%.
“The issue of immediate concern to the future of mining at West Elk and other North Fork coal mines,” Sanderson said, “is not that the mine’s parent company has to seek the protections afforded by Chapter 11. It is in securing access to additional coal reserves to facilitate continued operations to meet market demand.” To facilitate such access, the United States Forest Service has issued a Supplemental Draft Environmental Impact Statement that would reinstate the North Fork exception to facilitate limited road building and construction on 19,000 acres of national forest land designated for multiple uses and mining (out of more than 4.2 million acres designated for special protection). CMA and the industry strongly support that alternative, which is essential to continued mining at West Elk and in the North Fork. “This is a federal action that industry and CMA can support,” Sanderson concluded, “noting that it approves a state proposal that was the result of a highly transparent and public process supported by three of Colorado’s governors.”