Bankrupt Patriot Coal will become the first U.S. operator to stop large-scale mountaintop removal mining in Central Appalachia under a historic agreement with three environmental groups.
The deal was struck Thursday and presented to a federal judge in Huntington, W.Va. It stems from pollution lawsuits filed by the Sierra Club, Ohio Valley Environmental Coalition and West Virginia Highlands Conservancy.
Under the settlement, Patriot must scale back its surface mining to no more than 3 million tons by 2018. Some equipment will be idled immediately. Going forward, the company agrees to do only small-scale surface mining near planned or existing underground operations, meaning it will withdraw permits for two planned mountaintop mines in West Virginia.
In exchange, the company gets an additional 15 months to finish cleaning up selenium pollution. The work was supposed to be completed by May 2013 - that deadline is now August 2014. It also extends other deadlines announced in a January 2012 settlement.
Patriot's president and CEO, Bennett K. Hatfield, said in a statement that today's agreement makes a successful emergence from Chapter 11 more likely.
"This settlement agreement allows Patriot to defer up to $27 million of compliance-related cash outlays from 2012 and 2013 into 2014 and beyond, which improves our liquidity as we reorganize our company," Hatfield said, adding that it fit with the company's strategy of focusing on coal that can be used to make certain types of metals.
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