UPDATE 2-Patriot Coal gets permit after EPA mine delay

Wed Jan 6, 2010 12:09pm EST

Related Topics

* Permit is for West Virginia mountaintop mine

* Case was one of 79 held up by EPA for evaluation

* Patriot shares up 1.9 pct; other coal stocks also rise (Adds company and EPA comments, stock move, byline)

By Steve James

NEW YORK, Jan 6 (Reuters) - Patriot Coal Corp PCX.N has received a permit for a new mine in West Virginia, one of 79 cases that had been held up by the Environmental Protection Agency for evaluation on whether surface mining operations pollute local water.

The news boosted Patriot's stock, along with shares of other coal companies, including Arch Coal Inc (ACI.N), whose own EPA-delayed plans for a mountaintop mine were boosted by a federal court ruling.

The issue pits miners, who argue it is more economical to dig into mountainsides than sink underground shafts, against environmentalists, who accuse the companies of dumping waste and polluting rivers and streams.

Patriot said the U.S. Army Corps of Engineers completed its evaluation process and issued a permit for the Hobet 45 mountaintop mine on Wednesday, a day after the EPA's decision to lift its objections.

The EPA said the Hobet 45 mine now meets Clean Water Act requirements, after plans were redesigned to eliminate nearly 50 percent of stream impacts, reduce anticipated stream contamination, and protect public health.

"We are encouraged that, through a constructive process of engagement and discussion, we have reached agreement with EPA on a mine plan that minimizes impact to the environment," said Patriot Chief Executive Officer Richard Whiting.

EPA Administrator Lisa Jackson said, "Our role ... is to ensure that mining companies avoid environmental degradation and protect water quality so that Appalachian communities don't have to choose between jobs and their health.

"Our goal is to ensure Americans living in coal country are protected from environmental, health and economic damage."

In September, in a move seen as favoring environmentalists, the EPA said 79 pending permits in Appalachia had to undergo additional evaluation because they posed potential hazard to local water.

Mining companies said the EPA decision threatened job security in parts of Kentucky, West Virginia and Ohio that depend heavily on coal mining.

But environmental groups welcomed the decision and called on the Obama administration to reverse rules that allow surface mines and to enforce clean air and water legislation.

The Hobet 45 mine is part of Patriot's Corridor G mining complex in southern West Virginia. At full capacity, it will produce nearly 4 million tons of thermal coal annually.

In the Arch Coal case, the Federal District Court in southern West Virginia extended a court-established deadline to respond to a company request to end the litigation on the proposed Spruce No. 1 mine in Logan County.

EPA and Mingo Logan Mining Co, a subsidiary of Arch Coal, asked for the extension in order to continue discussions to determine if a revised mining plan could be developed that will comply with the Clean Water Act.

In midday trading on the New York Stock Exchange, Arch stock was 5.0 percent higher at $25.79, while Patriot rose 1.9 percent to $18.64. The Dow Jones coal index .DJUSCL was up 1.7 percent. (Reporting by Steve James; Editing by Derek Caney and John Wallace)

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