A group of retired Warrick County miners who had faced possible reductions in health benefits will not see those reductions after all, their labor union says.
The affected group includes 208 retired Squaw Creek miners and their spouses or survivors. The Squaw Creek Mine, which produced coal for Alcoa's Warrick County operations, was part of a joint venture between Peabody Coal and Alcoa. In that agreement, Alcoa assumed liability for retiree health care benefits.
In 2007, Peabody created a spinoff company called Patriot Coal. Patriot (and subsidiary Heritage Coal) filed for Chapter 11 bankruptcy protection in May. That case is making its way through U.S. Bankruptcy Court in Richmond, Virginia.
As part of the Patriot bankruptcy case, last month Patriot's attorneys proposed a deal that would have terminated the Peabody/Alcoa agreement. Alcoa would have paid Heritage $22 million cash, but only $3 million of that money would have been earmarked for Squaw Creek retiree health care liabilities. The rest of the money would have gone toward the debtors' bankruptcy costs.
That proposal was withdrawn this week.
United Mine Workers of America spokesman Phil Smith said the union and Alcoa came to an agreement late Wednesday in which Alcoa will continue to fund the Squaw Creek retirees' health care benefits.
"It's as if what was proposed never happened. That's our understanding," Smith said. "We're happy that our members benefits aren't going to be put at risk here. That's a good thing."
Local Alcoa spokesman Jim Beck said only, "We stand ready to make the same payments going forward."
Andrew Squire, who works for public relations firm Joele Frank, and who acts as Patriot's spokesman, said Patriot had nothing to add.
"The company hasn't been interested in commenting beyond the court filings," Squire said.