ALLIANCE RESOURCE PARTNERS LP
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
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FY2024 · Filed Feb 27, 2025
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15. Asset Retirement Obligations
The following table presents the activity affecting the asset retirement and mine closing liability:
| · · · · · · · | |||||
|---|---|---|---|---|---|
| · · Year Ended December 31, | |||||
| · 2024 · 2023 | |||||
| · · (in thousands) · | |||||
| · · · · · · · | |||||
| Beginning balance | | $150,443 | | $149,813 | |
| Accretion expense | | 4,528 | | 4,433 | |
| Payments | | (1,770) | | (2,317) | |
| Allocation of liability associated with mine development and change in assumptions | | 5,576 | | (1,486) | |
| Ending balance | | $158,777 | | $150,443 | |
For the year ended December 31, 2024, the allocation of liability associated with mine development and change in assumptions increased by $5.6 million. The increase was largely attributable to higher cost assumptions.
For the year ended December 31, 2023, the allocation of liability associated with mine development and change in assumptions decreased by $1.5 million. The decrease was largely attributable to lower cost assumptions.
The impact of discounting our estimated cash flows resulted in reducing the accrual for asset retirement obligations by $120.1 million and $116.2 million at December 31, 2024 and 2023, respectively. Estimated payments of asset retirement obligations as of December 31, 2024 are as follows:
| · · · · | |||
|---|---|---|---|
| Year Ended · · · · | |||
| December 31, · (in thousands) | |||
| · · · · | |||
| 2025 | | $3,621 | |
| 2026 | | 4,763 | |
| 2027 | | 7,043 | |
| 2028 | | 9,312 | |
| 2029 | | 9,584 | |
| Thereafter | | 244,592 | |
| Aggregate undiscounted asset retirement obligations | | 278,915 | |
| Less: effect of discounting | | (120,138) | |
| Total asset retirement obligations | | 158,777 | |
| Less: current portion | | (3,621) | |
| Non-current asset retirement obligations | | $155,156 | |
As of December 31, 2024 and 2023, we had approximately $170.1 million and $173.5 million, respectively, in surety bonds outstanding to secure the performance of our reclamation obligations.
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