A trio of coal companies has agreed to temporarily limit operations at three mountaintop removal mines opposed by environmentalists.

The deal struck Wednesday settles the latest round in a long-running battle pitting the Ohio Valley Environmental Coalition and several other groups against the Army Corps of Engineers and coal mine operators. OVEC won a court ruling in March 2007 that the corps violated federal law by issuing valley fill permits for mountaintop removal mines without conducting extensive environmental reviews.

OVEC contends three Clean Water Act permits the corps issued in March "suffer from the same defects" cited by U.S. District Judge Chuck Chambers in 2007 when he rescinded permits issued for four Massey Energy Co. (nyse: MEE - news - people ) mines. Chambers followed that decision up in June with a ruling that using settling ponds to remove sediment from streams at mountaintop removal coal mines violates the Clean Water Act.

The corps had maintained that more extensive reviews weren't necessary for the permits and that mitigation techniques such as restoring streams would offset losses.

OVEC targeted permits issued to subsidiaries of Pittsburgh-based Consol Energy (nyse: CNX - news - people ), Richmond, Va.-based Massey and Hansford-based Tyler Morgan LLC.

The group agreed to drop its request for a restraining order after discovering that extensive work, including filling streams with rock and debris, has already occurred at portions of the mines covered by the permits. In exchange, Tyler Morgan, Massey and Consol agreed to mine on just portions of the areas allowed by the permits and give OVEC 30 days notice if they intend to mine additional areas.

Lawyer Joe Lovett, who represents OVEC, told Chambers the agreement should buy enough time for the 4th U.S. Circuit Court of Appeals in Richmond to decide an appeal of the judge's 2007 ruling. Arguments in the appeal are scheduled for next month. The case is being watched closely by the coal industry and Wall Street. Both fear surface mining - which costs far less than underground operations - could be curtailed if Chambers' ruling is upheld.

Massey and Consol officials testified that they've already done much to disrupt the valleys covered by the new permits.

For instance, Consol subsidiary Fola Coal Co. already has removed one intermittent stream covered by a new valley fill permit for its Ike Fork No. 1 and Ike Fork No. 2 mines in Nicholas and Clay counties, said Mike Isabell, manager of technical services for Consol's Amvest West Virginia Coal subsidiary.

Massey, meanwhile, has partially filled two streams at its Twilight surface mine in Raleigh County, according to testimony from Phil Marsh, president of Massey subsidiary Progress Coal Co.

Limiting its Twilight surface mine to filling one valley will allow operations to continue for about a year, Marsh testified. "We need these fills for areas where mining is currently occurring."

Likewise, limiting Fola Coal to one valley fill will allow mining to continue for approximately eight to 12 months, Isabell said.

Tyler Morgan struck its settlement with OVEC before the hearing and agreed to use just one valley fill at its Fourmile 2 and 3 mines in Kanawha County, Lovett said.


http://www.forbes.com/feeds/ap/2008/04/23/ap4925979.html


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