May 17, 2020

Peabody and assurance: coal mine clean-up deal in U.S reached

Peabody Energy Corp
U.S Coal production
coal production
Dale Benton
2 min
Peabody and assurance: coal mine clean-up deal in U.S reached
The largest U.S coal producer has struck a deal to cover the costs of mine clean-up liabilities while in bankruptcy with three U.S states, court documen...

The largest U.S coal producer has struck a deal to cover the costs of mine clean-up liabilities while in bankruptcy with three U.S states, court documents have revealed.

Peabody Energy Corp, the world’s largest private-sector coal company with operations in the U.S and Australia, is currently in a state of bankruptcy.

The company has benefited from a governmental program known as self-bonding, which allows the company to extract coal without setting aside cash or collateral in a bid to ensure the company will restore the site to its natural setting.

"Peabody is continuing our actions to restore coal mined lands using best-in-class practices, and we are committed to our reclamation as we have been for decades," said Peabody President – Americas Kemal Williamson.

"We are pleased to reach agreements that provide additional security toward our reclamation obligations and look forward to ongoing discussions regarding Peabody's reclamation bonding long term."

Self-bonding has come under increased scrutiny due to the bankruptcy filing by Peabody as the practice exposes taxpayers to potential billion-dollar clean-up cost, should the company walk away from the site.

In the deal with Wyoming, New Mexico and Indiana, about 15 percent of Peabody's $1.2 billion in self-bonds will be secured by debtor-in-possession financing during its bankruptcy.

Wyoming can receive $127 million cash if Peabody were to walk away from reclamation while in bankruptcy, New Mexico $32 million and Indiana $17 million.

The agreement with Peabody is yet to be approved by a federal bankruptcy judge, with a hearing scheduled for August this year.

Following uncertainty as to whether Peabody will replace its self-bonded liabilities once the company emerges from bankruptcy, state regulators are concerned that the state would foot the bill for the clean-up of the mine.

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May 11, 2021

Gerald Group resolves iron ore dispute with Sierra Leone

Gerald Group
SL Mining
Iron ore
Marampa iron ore mine
2 min
Gerald Group, the US commodity broker, set to restart iron ore shipments from Marampa mine with subsidiary SL Mining

Gerald Group, the US commodity trader, will pay Sierra Leone $20mn and cede a 10% stake in an iron ore project as part of the resolution to a nearly two-year dispute that led to the shutdown of production, the two sides revealed.

SL Mining

Gerald's wholly-owned subsidiary SL Mining filed for arbitration in August 2019 over a royalty payment dispute and suspended the Marampa mine the following month. Sierra Leone's government responded by cancelling its mining licence. 

As part of the agreement signed on Friday, Sierra Leone will take a non-dilutable 10% stake in a new company that will replace SL Mining and resume operations at Marampa by June 1, Gerald said in a statement.

Iron Ore

Gerald will make two $10mn payments this year and will have the immediate right to ship its current stockpile of about 707,000 tonnes of iron ore, it said.

Both sides will withdraw their legal claims before the International Chamber of Commerce (ICC) and International Centre for Settlement of Investment Disputes (ICSID), the statement added.

Gerald’s chairman and CEO Craig Dean commented: "I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the government of Sierra Leone."

SL Mining

Sierra Leone

Sierra Leone's Mines Minister Timothy Kabba told a news conference on Tuesday that the agreement was a milestone for the country.

"Whatever the pain we may have borne or dreaded throughout these two years ... this outcome justifies our action," he said.

Gerald estimates that Marampa holds about 1 billion tonnes of iron ore with a potential lifespan of 30 years.

Gerald Group

Back in 2019, Dean spoke with Mining about the development of Marampa and commented: "SL Mining offers a substantial opportunity for Gerald Group as our Marampa mine in Sierra Leone is set to deliver six million tonnes of high-grade iron ore during its operational life. If you analyse the iron ore market it has transformed, even from a couple of years ago when prices were very low. Now prices have stabilised we’re in a favourable position with our first shipments leaving for China.

"Our goal is to make ‘Marampa Blue’ an internationally recognised premium grade iron ore brand. We intend to expand the delivery of high-grade 65% iron ore concentrate to markets in Europe and Africa.”

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