Arch Coal is suspending efforts to secure a mining permit for the Otter Creek coal reserves near Ashland in southeastern Montana, due to capital constraints, near-term weakness in coal markets and an extended and uncertain permitting outlook.
Arch secured lease rights to approximately 8300 acres of state-owned minerals in the Otter Creek area in 2010. Since that time, the company has engaged state regulators through the permitting process in order to obtain the approval to mine. That process has taken longer than anticipated, and further deterioration in coal markets has led to the decision to suspend the permitting effort.
Arch Coal indicated that the Powder River Basin remains an important coal supply region for domestic and international power generators. However, given current conditions, the company can no longer devote the time, capital and resources required to develop a coal mine on the Otter Creek reserve block.
According to the company, it will remain committed to navigating a challenging market environment, executing upon its prudent capital allocation strategy and preserving liquidity. This step will allow Arch to further intensify its focus on operating safe, responsible and low-cost mines.
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/11032016/arch-coal-suspends-mine-permitting-efforts-for-otter-creek-reserves-377/
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