Title: Fiscal risk to West Virginia's special reclamation fund

Authors: Michael J. Hicks

Addresses: Department of Systems and Engineering Management, Air Force Institute of Technology and Marshall University, Wright-Patterson AFB 45433, Ohio 45433, USA

Abstract: 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.

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.

DOI: 10.1504/IJRAM.2007.014097

International Journal of Risk Assessment and Management, 2007 Vol.7 No.5, pp.739 - 757

Published online: 18 Jun 2007 *

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