Keywords: fiscal risk, financial risk, coal bond, mining, special reclamation fund, abandoned mine lands, AMD water treatment, revenue collection, expenditure, coal price variability, technological change, regulatory change, environmental remediation, risk assessment, minerals industry, West Virginia, USA, United States, bond defaults
Fiscal risk to West Virginia's special reclamation fund
This paper analyses fiscal risk to West Virginia's Special Reclamation Fund for abandoned mine lands and AMD water treatment from 1990 through 2003. I find that, despite tightening regulatory restrictions which have led to reductions in bond defaults there are continued risk to both revenue collections and expenditures. These include coal price variability, technological or regulatory change and increased costs of environmental remediation. Risks at the mine level include capital costs, mine age, size and changes to corporate structure. Importantly, it is past compliance history that provides the greatest explanation of coal mine bond defaults.