The bankruptcy judge would have allowed Patriot to eliminate all current vision, dental, life and accidental death insurance benefits to union miners.
Under the new contract, Patriot will contribute 3 percent of a miners' gross wages to a 401(k) or similar plan, to provide health-care benefits when the miners retire. This will replace existing health-care benefit plans given to retired union miners.
Patriot Coal was founded in 2007 when Peabody Energy sold all its union operations east of the Mississippi to the newly created company. In 2008, Patriot bought Magnum Coal, a company that had taken over union mines previously operated by Arch Coal.
Those two deals, the UMW argues, handed Patriot Coal far more liabilities than assets. Today, Patriot is paying many benefits to 23,000 union retirees and their dependents -- most of the retired union miners never worked a day for that company.
The cost of paying those long-term retirement and health benefits was a major factor that forced Patriot to file for bankruptcy protection.
Patriot Coal and UMW leaders have said they believe a major part of Patriot's financial problems came from assuming the obligations to pay pension and health-care benefits that were due the miners who worked for Peabody and Arch, most of whom were retired when Patriot acquired those mines.
In a document filed with the U.S. Bankruptcy Court, Patriot estimated that it will end up paying $1 billion in "retiree benefits" to union miners under those sales agreements.
In its bankruptcy filing, Patriot stated that its bankruptcy was caused by many factors, including: reduced demand for coal, "increasingly adverse" safety and environmental regulations, as well as "unsustainable" costs for wages, benefits and health care for retired miners and their spouses.
Changes under the new contract, according to a statement Patriot filed with the bankruptcy court, will save about $520 million over the next four years.
Patriot operates eight mining complexes in West Virginia -- Heritage Coal, Colony Bay Coal, Eastern Associated Coal, Mountain View Coal, Pine Ridge Coal, Rivers Edge Mining, Apogee Coal and Hobet Mining.
Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.