Alpha Natural Resources will soon emerge from its reorganization in bankruptcy. (Luke Sharett/Bloomberg)

Alpha Natural Resources will emerge from bankruptcy with a plan to cover most, if not all, of its mine reclamation costs, but the payments for the cleanup could be made as late as 2025 and depend in part on the future financial performance of the restructured company in a tough economy for the business of mining and selling coal.

Alpha, once the nation’s fourth-largest coal company, filed for bankruptcy Aug. 3, 2015, with a string of mine reclamation sites that would cost about $700 million to restore. Many environmental groups were worried that in bankruptcy, much of that liability for cleaning up old coal mines would be lifted from the shoulders of Alpha and fall instead onto U.S. taxpayers.

Under the plan approved by a federal bankruptcy judge, $293 million in reclamation liabilities would be covered by at least $209 million in cash payments into a special reclamation fund over a nine-year period. Additional funds, if needed, could come from a portion of the free cash available to a newly reorganized, privately held Alpha. The bulk of the remaining reclamation liabilities would be fully assumed by a newly formed company made up mostly of the old Alpha’s crown jewels, most notably its Wyoming open pit mines. (These figures, from the bankruptcy court filing, were confirmed by Alpha.)

Alpha said in a statement Thursday evening that it was “positioned well to satisfy its environmental obligations on an ongoing basis.”

But some environmental experts said that by postponing payments for reclamation, there was a risk that financial problems could arise again for Alpha. Coal producers are under pressure brought on by cheap natural gas and policies designed to slow climate change. The financial woes of Alpha also pushed other coal giants into bankruptcy, including the biggest of all, Peabody Energy.

“One of the troubling things to me is that I don’t think the total is enough, and Alpha has until 2025 to fully finance all that,” said Peter Morgan, a staff lawyer with the Sierra Club. “The big question for everyone is: If the reorganized Alpha goes under sometime in the next few years, there’s for sure not going to be enough money set aside to cover the reclamation costs. If tomorrow the coal markets start turning around and they’re able to follow through, then it’s close. But they don’t have any wiggle room if the markets don’t pick up.”

Morgan added that over the next nine years, Alpha would continue mining and would accumulate more reclamation liabilities not included in the $293 million total.

Moreover, he said that the bankruptcy settlement shortchanges money needed for water treatment. People involved in the negotiations said the court would set aside a modest amount of money for restoring waterways contaminated by coal operations.

People close to the bankruptcy talks — which included federal and state mining and environmental regulators — said the final package would also include backstops.

The cash destined for reclamation would be backed up by $100 million of new bonds and $150 million of previously issued bonds guaranteed by companies other than Alpha to make sure most of the reclamation work gets done.

This restructuring was part of an effort to rid the company of self-bonding — in which the company backs surety bonds with nothing other than its own commitment.

The bankruptcy plan splits the old company in two.

A newly reorganized Alpha would be left with 29 active mines in Appalachia, the bulk of them in West Virginia. It would also inherit inactive mines awaiting reclamation. It could emerge from bankruptcy as early this month, the company said.

The most senior creditors of the bankrupt firm would give up their claims in exchange for ownership of a new company, to be called Contura. It would own and operate two open pit mines in Wyoming, one mine each in Pennsylvania and West Virginia, six mines in Virginia, and an export terminal in Virginia.

Contura has pledged to fully cover all the costs for reclamation on its properties. Those costs for Wyoming alone amount to $411 million, according to court records.

Contura would put up equipment and other property approved by regulators as collateral for bonds that would guarantee the cost of reclamation.

In addition, by 2025, Contura would provide at least $50 million and as much as $100 million of the $209 million set aside for the reclamation of mines that would remain part of a reorganized Alpha. The second half of that amount would be paid only if the free cash flow of the reorganized Alpha failed to bring the fund up to $209 million.

This reclamation money could be used in five states: West Virginia, Kentucky, Tennessee, Illinois and Virginia.

The bankruptcy court also will establish a $39 million fund to restore areas where old coal mines, some no longer active, have scarred the landscape.

“An important piece of context for all of this is that the primary factor driving the U.S. and the states to agree to this reclamation settlement with Alpha is the threat that Alpha could liquidate if the reorganization plan is not confirmed,” the Sierra Club’s Morgan said. “So long as companies hold that trump card, state regulators and other interested parties will be limited in their ability or willingness to push hard against the bankrupt companies. Essentially, these state and federal regulators, by recklessly allowing so much self-bonding, have allowed themselves to be blackmailed by the threat of liquidation and abandonment of the self-bonded mines.”