By St. Louis Business Journal

Arch Coal has agreed to pay $2 million to clean up toxic runoff in five areas in West Virginia.

Environmental groups, including the West Virginia Chapter of the Sierra Club, West Virginia Highlands Conservancy, Ohio Valley Environmental Coalition, and Coal River Mountain Watch, filed the suit against Arch in June 2010.

The settlement requires Arch Coal to immediately begin installing treatment technology to bring selenium discharges within acceptable levels. The settlement also requires Arch Coal to pay a total of $2 million up front, with $1.8 million directed to support sustainable development and land use planning in West Virginia, and the remaining $200,000 to the U.S. Treasury.

The settlement also requires strict monitoring of selenium treatment at the six sites. If the mines continue to discharge selenium above permit limits, Arch Coal will have to pay up to $25,000 for each new violation, the environmental groups said today.

Selenium, a toxic element that causes reproductive failure and deformities in fish and other forms of aquatic life, is discharged from many surface coal-mining operations across Appalachia. At very high levels, selenium can pose a risk to human health, causing hair and fingernail loss, kidney and liver damage, and damage to the nervous and circulatory systems.

⿿We are pleased that $1.8 million of this settlement will support the development of the Land Use and Sustainable Development Law Clinic at the West Virginia University College of Law,⿝ Arch said in a statement today. ⿿This clinic will provide transactional legal services to individuals, non-governmental organizations, local governments and communities designed to address land use and conservation needs in three West Virginia watersheds. In addition, Arch is taking preventative measures to achieve consistent selenium compliance at these sites, including the installation of five treatment systems.⿝

On Friday, Arch (NYSE:ACI) reduced its forecast for adjusted earnings before interest, taxes, depreciation, depletion and amortization to $900 million to $1 billion range for full year 2011 after the company had to idle its Mountain Laurel mining complex for nearly 45 days following a roof collapse in August.

Arch is led by Steven Leer, chairman and chief executive. Its $3.4 billion acquisition earlier this year of International Coal Group makes Arch Coal the second-largest metallurgical coal supplier in the U.S.

Copyright 2011 American City Business Journals

Copyright 2010