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Texas Lets Company Near Bankruptcy Expand Mines

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Luminant Mining Co

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Scattered between the green rolling hills and thick pine forests of East Texas are small towns that have one thing in common: For generations, they have relied on coal mines and power plants for jobs, population growth and economic development.

The industry helps define Tatum, a community barely a half-hour from the Louisiana border. The Little League team is called the Miners, and their fields were paid for by utility companies. Year after year, hilltops are cleared by strip mining, then restored with grass, trees and ponds, before another hill is scoured for coal.

But that process is now at risk because one of the region's major mining companies is on the brink of bankruptcy. Besides the potential economic damage, bankruptcy could mean that heavily mined land goes unrestored because Luminant Mining Co. was allowed to operate without a reserve fund to pay for reclamation. The company insists it has sufficient money available to meet all of its responsibilities.

Luminant and its parent company are struggling with more than $30 billion in debt and a rapidly dwindling cash flow. Analysts have said bankruptcy is possible within months.

Reporting by Ramit Plushnick-Masti, Associated Press.

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