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Asset Retirement Obligations | 12 Months Ended
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Dec. 31, 2019
Asset Retirement Obligation Disclosure [Abstract] |
Asset Retirement Obligations | Asset Retirement Obligations The Company's asset retirement obligations are principally for costs to close its surface mines and reclaim the land it has disturbed as a result of its normal mining activities as well as for costs to dismantle certain mining equipment at the end of the life of the mine. The Company determined the amounts of these obligations based on cost estimates, adjusted for inflation, projected to the estimated closure dates, and then discounted using a credit-adjusted risk-free interest rate. The accretion of the liability is being recognized over the estimated life of each individual asset retirement obligation and is recorded in the line “Cost of sales” in the accompanying Consolidated Statements of Operations. The associated asset is recorded in “Property, Plant and Equipment, net” in the accompanying Consolidated Balance Sheets. The depreciation of the asset is recorded in the line “Cost of sales” in the accompanying Consolidated Statements of Operations. Bellaire is a non-operating subsidiary of the Company with legacy liabilities relating to closed mining operations, primarily former Eastern U.S. underground coal mining operations. These legacy liabilities include obligations for water treatment and other environmental remediation that arose as part of the normal course of closing these underground mining operations. The Company determined the amounts of these obligations based on cost estimates, adjusted for inflation, and then discounted the amounts using a credit-adjusted risk-free interest rate. The accretion of the liability is recognized over the estimated life of the asset retirement obligation and is recorded in the line “Closed mine obligations” in the accompanying Consolidated Statements of Operations. Since Bellaire's properties are no longer active operations, no associated asset has been capitalized. A reconciliation of the Company's beginning and ending aggregate carrying amount of the asset retirement obligations are as follows:
|  | Coal Mining |  | NAMining |  | Unallocated Items |  | NACCO Consolidated
Balance at January 1, 2018 |  | $ | 22,589 |  |  | $ | 1,085 |  |  | $ | 16,423 |  |  | $ | 40,097 |
Liabilities incurred during the period |  | — |  |  | 189 |  |  | — |  |  | 189 |
Liabilities settled during the period |  | (920 | ) |  | — |  |  | (747 | ) |  | (1,667 | )
Accretion expense |  | 1,504 |  |  | 31 |  |  | 1,044 |  |  | 2,579 |
Revision of estimated cash flows |  | (2,777 | ) |  | (820 | ) |  | 102 |  |  | (3,495 | )
Balance at December 31, 2018 |  | $ | 20,396 |  |  | $ | 485 |  |  | $ | 16,822 |  |  | $ | 37,703 |
Liabilities incurred during the period |  | — |  |  | 91 |  |  | — |  |  | 91 |
Liabilities settled during the period |  | (8,265 | ) |  | — |  |  | (752 | ) |  | (9,017 | )
Accretion expense |  | 1,260 |  |  | 28 |  |  | 1,323 |  |  | 2,611 |
Revision of estimated cash flows at MLMC |  | 3,145 |  |  | — |  |  | — |  |  | 3,145 |
Revision of estimated cash flows at Centennial |  | 2,479 |  |  | — |  |  | (153 | ) |  | 2,326 |
Balance at December 31, 2019 |  | $ | 19,015 |  |  | $ | 604 |  |  | $ | 17,240 |  |  | $ | 36,859 |
During 2019, the Company transferred the mine permits for certain Centennial mines to an unrelated third party. As a result of these transfers, the Company was relieved of the associated mine reclamation obligations and recorded a $5.4 million reduction to Centennial's asset retirement obligation, included in "Liabilities settled during the current period" in the table above. As part of these transactions, the Company transferred a $3.4 million escrow account and paid $2.4 million of cash, resulting in a net loss on the transactions of $0.4 million recognized within cost of sales in the Consolidated Statement of Operations and reflected on the line “Revision of estimated cash flows at Centennial” in the table above. The reduction to the asset retirement obligation related to these transfers was offset by a $2.0 million increase to the asset retirement obligation related to updated costs estimates for the remaining Centennial asset retirement obligations recognized within cost of sales in the Consolidated Statement of Operations and reflected on the line “Revision of estimated cash flows at Centennial” in the table above. Due to updated cost estimates and changes in timing of the asset retirement obligation for MLMC, the Company recognized a $3.1 million increase to the asset retirement obligation in 2019 within cost of sales in the Consolidated Statement of Operations and reflected on the line “Revision of estimated cash flows at MLMC” in the table above. Prior to 2018, Bellaire established a $5.0 million Mine Water Treatment Trust to provide a financial assurance mechanism in order to assure the long-term treatment of post-mining discharges. The fair value of the Mine Water Treatment assets, which are recognized as a component of "Other Non-Current Assets" on the Consolidated Balance Sheets, are $10.1 million at December 31, 2019 and are legally restricted for purposes of settling the Bellaire asset retirement obligation. See Note 9 for further discussion of the Mine Water Treatment Trust.

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- Definition The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 410 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2175671 + Details
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