By Taylor Kuykendall

Less than a year after the release of a report identifying Barclays Plc as the lead financier of mountaintop removal coal mining, the international financial services provider has officially taken a policy against mountaintop removal coal mining.

For its policy purposes, Barclays defines mountaintop removal mining as "the removal of the whole or a portion of the upper fraction of a hill or mountain to access and recover a coal resource, with excess overburden stored as valley fill either permanently or temporarily." The mining technique, used largely in Appalachia, is one of the more economical methods of extracting coal, but has attracted widespread criticism over its environmental and health consequences.

"In respect of the Appalachian region of the United States (defined as Kentucky, Tennessee, West Virginia, and Virginia), Barclays recognizes that [mountaintop removal mining] is a legal mining method overseen by a robust regulatory regime in one of the most transparent and democratic jurisdictions in the world," Barclays' March policy position states. "However, it is also one that has been subject to intense political, judicial and regulatory debate over the last decade due to negative environmental and social impacts on the one hand, and positive economic impacts on the localities in which it is employed, on the other."

The Barclays note adds that due to a "confluence of market forces and regulatory scrutiny," the bank believes that mountaintop removal mining "will be phased out in the near to intermediate term." The policy position says Barclays does not directly finance mountaintop removal projects or developments and will apply enhanced due diligence to all credit and capital markets facilities to clients who do practice mountaintop removal.

"This includes a review of operating practices and track record of legal compliance, environmental management, reclamation, litigation and community relations and engagement," Barclays states.

Barclays does offer an exception to "significant producers" of mountaintop removal coal if the support will finance a company's transition away from the practice or restoration and reclamation of former mountaintop removal sites. Companies with mountaintop removal operations receiving financing from Barclays would require a written commitment to transition away from mountaintop removal "within a reasonable timeframe."

In April 2014, the Rainforest Action Network, Sierra Club and BankTrack published their fifth annual coal finance report card, finding that Barclays was the No. 1 bank financing mountaintop removal coal mining, with $550 million in loans and bonds through seven transactions in 2013. The report also identified the bank as the second-largest financier for coal-fired power lending and underwriting at $2.8 million. That report had concluded that while many top banks were backing off coal investments, groups such as Barclays and Citigroup were "seen as laggard" in moving away from backing the fuel.

Other banks, such as PNC Financial Services Group Inc., Morgan Stanley, Goldman Sachs Group Inc. and Bank of America Corp., have taken up policies of slowing or stopping the practice of financing mountaintop removal.

Citizen activists have long fought the mining practice, citing numerous health studies that have linked the practice to ill-health outcomes, such as cancer; widespread environmental impacts; and occasionally, damage to property from fly rock and dust. One campaign is seeking to pass the Appalachian Communities Health Emergency, or ACHE, Act, a piece of legislation that would halt the process of mountaintop removal until further studies have evaluated its potential health consequences.

The April 2014 report identifying coal's top financiers said the three largest producers of mountaintop removal coal were Alpha Natural Resources Inc., Arch Coal Inc. and Patriot Coal Corp. Patriot has committed to phase out its use of mountaintop removal coal mining.