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Arch Coal's Black Thunder mine

Arch Coal's Black Thunder mine in northeast Wyoming produces more than 80 million tons of coal annually.

The paper trail to open Otter Creek Mine is seven months cold, and plans for a $400 million railroad to service were shelved Wednesday, but embattled developer Arch Coal says the southeast Montana mine isn’t dead.

Arch Coal told The Gazette on Friday that the company will resubmit its mining permit application to the Montana Department of Environmental Quality in December so the mine near Ashland can move forward.

An estimated 1.4 billion tons of minable coal are in the Otter Creek area, which has proven elusive to mining companies for 36 years. The coal is spread beneath public and private property. The Montana Land Board sold Arch Coal the state’s public mineral leases in 2011 for $86 million.

“We continue to compile information and data to respond to Montana DEQ’s second set of inquiries related to the Otter Creek mine permit application,” said Logan Bonacorsi, of Arch Coal. “We anticipate resubmittal of the application later this year — now expected to be in early December. At that time, we believe the application will be deemed complete and the process will continue toward issuance of the mine permit.”

Wednesday, Arch collaborators announced that a proposed $400 million railroad to service the mine should be suspended until mine permits were approved. Arch is a partner in the Tongue River Railroad Co. with BNSF Railway and TRRC Financing, a limited liability company. BNSF spokesman Matt Jones made the announcement that the group was putting the brakes to federal permitting for the 42-mile railroad.

DEQ said Friday that permitting work on the Otter Creek mining project stalled in last spring when the state asked the coal company to correct hundreds of deficiencies in Otter Creek permit applications. Questions about water quality and quantity coming from the proposed mine have not been answered, said Kristi Ponozzo, DEQ spokeswoman. Soil and wildlife issues at the mine site also need to be addressed.

“We're still waiting for their official response on those deficiencies,” Ponozzo said. “They have indicated they were going to respond to those in December, but we’ve heard other dates as well.”

Work on the environmental study for the mine has also stalled, partly because water data missing from the mine permit applications is also essential to determining the mine’s environmental impacts.

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If Arch Coal resubmitted its permits fully answered next month, a response from the state wouldn’t be due for another 120 days.

Opponents to Otter Creek mine suggested that Arch Coal’s finances were to blame for the delays.

Arch Coal, the second largest coal company in the United States, revealed in early November that it might have to file for bankruptcy. The company’s stock was selling for just over a dollar Wednesday. In January the coal company withdrew its bid for a 957 million-ton lease near the Black Thunder Mine in Wyoming.

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