Arch Coal (ACI)

 

SMCRA and counterpart state laws and regulations establish operational, reclamation and closure standards for all aspects of surface mining, as well as most aspects of underground mining. We base our estimates of reclamation and mine closure liabilities on permit requirements, engineering studies and our engineering expertise related to these requirements. Our management and engineers periodically review these estimates. The estimates can change significantly if actual costs vary from our original assumptions or if governmental regulations change significantly. We are required to record new obligations as liabilities at fair value under generally accepted accounting principles. In estimating fair value, we considered the estimated current costs of reclamation and mine closure and applied inflation rates and a third-party profit, as required. The third-party profit is an estimate of the approximate markup that would be charged by contractors for work performed on our behalf. The resulting estimated reclamation and mine closure obligations could change significantly if actual amounts change significantly from our assumptions, which could have a material adverse effect on our results of operations and financial condition.

 

 

SMCRA and counterpart state laws and regulations establish operational, reclamation and closure standards for all aspects of surface mining, as well as most aspects of underground mining. We base our estimates of reclamation and mine closure liabilities on permit requirements, engineering studies and our engineering expertise related to these requirements. Our management and engineers periodically review these estimates. The estimates can change significantly if actual costs vary from our original assumptions or if governmental regulations change significantly. Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, which we refer to as Statement No. 143, requires us to record these obligations as liabilities at fair value. In estimating fair value, we considered the estimated current costs of reclamation and mine closure and applied inflation rates and a third-party profit, as required by Statement No. 143. The third-party profit is an estimate of the approximate markup that would be charged by contractors for work performed on our behalf. The resulting estimated reclamation and mine closure obligations could change significantly if actual amounts change significantly from our assumptions, which could have a material adverse effect on our results of operations and financial condition.

 

 

SMCRA and counterpart state laws and regulations establish
operational, reclamation and closure standards for all aspects
of surface mining, as well as most aspects of underground
mining. We base our estimates of reclamation and mine closure
liabilities on permit requirements, engineering studies and our
engineering expertise related to these requirements. Our
management and engineers periodically review these estimates.
The estimates can change significantly if actual costs vary from
our original assumptions or if governmental regulations change
significantly. Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement
Obligations, which we refer to as Statement No. 143,
requires us to record these obligations as liabilities at fair
value. In estimating fair value, we considered the estimated
current costs of reclamation and mine closure and applied
inflation rates and a third-party profit, as required by
Statement No. 143. The third-party profit is an estimate of
the approximate markup that would be charged by contractors for
work performed on our behalf. The resulting estimated
reclamation and mine closure obligations could change
significantly if actual amounts change significantly from our
assumptions, which could have a material adverse effect on our
results of operations and financial condition.