Thu October 10, 2013
UMWA, Peabody, Patriot Reach Agreement
The nearly monthly rallies by retired miners in front of Peabody Energy’s headquarters in downtown St. Louis are now a thing of the past.
The United Mine Workers of America, Peabody Energy, and Patriot Coal announced a settlement late Tuesday night.
The UMWA had been pushing Peabody through its rallies and a lawsuit filed in Charleston to pay for retirees’ health benefits after its spin-off, Patriot Coal, filed for bankruptcy last year.
Patriot had largely shed its $1.6 billion liability in healthcare benefits for about 23,000 retired miners and their dependents.
As part of the agreement Peabody will pay $310 million into a Voluntary Employees Beneficiary Association (VEBA) managed by the UMWA. Patriot will pay $75 million.
In exchange UMWA spokesman Phil Smith says the union will stop the rallies it’s held in in front of Peabody’s headquarters.
"We’re pleased we’ve been able to reach this agreement, and we’re pleased that we’re able to provide some measure of health care for our members moving forward," Smith said. "That was the purpose of those rallies, and that’s largely been accomplished."
The agreement does not include Arch Coal, which the UMWA has also pushed to provide funding for retirees’ health benefits later taken on by Patriot.
Patriot said in a statement that the agreement with the UMWA and a separate agreement with Peabody put it in good position to emerge from bankruptcy.
Peabody Energy put out a separate statement saying the company is pleased "to resolve the uncertainty among Patriot retirees by providing substantial funding for the newly established Voluntary Employee Beneficiary Association."
The UMWA is not certain how long the more than $400 million to the VEBA will fund full health benefits for 11,000 retired miners and their dependents.
"We know it will provide benefits through at least 2014," Smith said. "What happens after that, we really just don’t have enough experience to know that."
Smith said the union is backing federal legislation to expand the Coal Act to include miners who retired after 1994 for long-term health care coverage.
He says the union continues to negotiate with Arch Coal.
A federal bankruptcy judge still must approve the settlement.
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