Asset Retirement Obligation (ARO) Audits for Two Projects

Kentucky and West Virginia
Alpha Natural Resources

Conducting an audit of Asset Retirement Obligation financial estimates for multiple mines in two states

Alpha Natural Resources (ANR) hired RESPEC to conduct an audit of ARO estimates with site investigations, a review of permitting requirements, a review of unit costs, and an estimate of ARO costs. RESPEC conducted a reclamation audit to verify ongoing reclamation costs and assumptions reported by ANR to each of the state regulatory agencies. The initial phase of the audit focused on permits with a “reclamation only” status. Our team developed a sample set to represent all of the client’s permits across various states. The sample set included mines that represented varying degrees of reclamation, as well as designated mine types. RESPEC visited each site to verify reclamation requirements for the permit and validate reclamation estimates provided by ANR to each state. In addition to validating the anticipated reclamation plan, we reviewed unit costs and assumptions made by ANR for reasonableness and applicability to the currently approved reclamation plan. Our team developed a database to compare reclamation data provided by the client to internal reclamation calculations.