Montana mine expansion advances amid owner's bankruptcy

A major coal mine expansion in southeastern Montana received a preliminary green light from state and federal officials on Friday even as the mine's owner remains tied up in bankruptcy proceedings with plans to sell the property.

Officials released an 800-page environmental study of Westmoreland Coal Co.'s expansion of the Rosebud Mine expansion that clears the way for a final decision in coming months.

Westmoreland declared bankruptcy in October with more than $1.4 billion in debt amid declining demand for the heavily-polluting fuel. The Colorado-based company is one of the oldest coal companies in the U.S., with mines in Montana, Wyoming, New Mexico, Ohio, North Dakota and Texas.

The move to advance the Montana project came after environmentalists pressed unsuccessfully for a delay until the mine's fate is determined in January.

The 10-square-mile (25-square kilometer) expansion area holds more than 70 million tons of coal. Development would extend the Rosebud mine's operating life another 19 years beyond its current end date of 2030.

The office of U.S. Interior Secretary Ryan Zinke mistakenly announced approval of the expansion in December 2017, but later retracted its statement and blamed an internal miscommunication.

A federal bankruptcy judge recently approved plans to auction Rosebud and other company assets on Jan. 22.

Regulators from the Montana Department of Environmental Quality and U.S. Department of the Interior have closely tracked the bankruptcy, but DEQ spokeswoman Kristi Ponozzo said the decision on the expansion was made independently of those proceedings.

"We can't prejudice against the company because they are in bankruptcy," she said. "We have to move forward with the permitting decision."

Representatives of Westmoreland declined comment.

Rosebud serves the Colstrip power plant, one of the largest coal-burning plants in the Western U.S.

Environmentalists who have been seeking to close down the Colstrip plant opposed the expansion. They said burning the coal that would be mined would contribute to climate change and damage natural resources including wildlife and water supplies.

Friday's study said the greenhouse gas emissions from mining and burning the coal would account for about one-fifth of one percent of total U.S. emissions.

Mike Scott with the Sierra Club said officials should hold off final approval of the expansion until after the auction. The concern, he said, is that a new owner wouldn't be able to carry out post-mining land reclamation work proposed by Westmoreland in detail in its permit application.

"Are they going to have the resources to do reclamation? Do they have the same expertise as Westmoreland? How financially stable are these companies?" Scott asked, adding, "There's all kind of things up in the air."

Rosebud employs about 340 people and produces roughly 9 million tons of coal annually. Since opening in 1968, it's produced a cumulative total of almost a half-billion tons of coal.