BILLINGS, Mont. (AP) — Montana regulators won't move forward on a proposal for a major new coal mine until sponsor Arch Coal Inc. addresses hundreds of deficiencies in its application, the state Department of Environmental Quality said Friday.
The St. Louis-based company's Otter Creek Mine would extract up to 20 million tons of coal a year from state-owned and private leases south of Ashland near the Wyoming border. The proposal already was more than two years behind schedule and faced strong opposition from nearby landowners and conservation groups.
In a 65-page letter dated Thursday, state officials for the second time in two years said they needed more information from the company before the project could proceed.
"There are deficiencies related to wildlife, hydrology, agriculture, reclamation, soils, the mine plan, post-mine topography," said Kristi Ponozzo, the department's public policy director. "We're diving into more particular refinement of those issues."
An Arch spokeswoman did not immediately respond to messages seeking comment. The company's reserves at Otter Creek hold an estimated 1.4 billion tons of coal.
The mine application was submitted in July 2012 and revised last year.
An environmental study of the project is underway and tentatively scheduled to come out later this year, Ponozzo said. That schedule could change depending in part on how long it takes Arch to respond to Thursday's information request, she said.
The state Land Board sold the public mineral leases involved in the mine proposal to Arch exactly five years ago this week, for $86 million.
Since then, Arch's stock price has collapsed from a high of $36 dollars in 2011 and was trading on Friday below 90 cents a share.
A new rail line would be needed to get coal from Otter Creek to markets in the U.S. and to West Coast ports where the fuel could be shipped overseas. That project, too, is behind schedule.
The U.S. Surface Transportation Board expects to release a draft environmental study of the 42-mile Tongue River Railroad this spring. Arch is a co-owner of the railroad with BNSF Railway of Fort Worth, Texas, and candy-industry billionaire Forrest Mars Jr.
