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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Kentucky

FOR IMMEDIATE RELEASE
Thursday, July 31, 2014

Elgin Mining Company Pays $3,221,292 To Settle Alleged Violations Of The Clean Water Act At Former Mining Sites In Western Kentucky

LOUISVILLE, Ky. – Elgin Mining Company of Vancouver, British Columbia, has agreed to settle non-compliance issues, associated with the Clean Water Act, for failure to perform mitigation requirements at former mining sites in Kentucky’s Muhlenberg and Crittenden counties in Kentucky. As a result, Elgin Mining and its subsidiaries have agreed to pay a $3,221,292 settlement announced David J. Hale, United States Attorney for the Western District of Kentucky and the U.S. Army Corps of Engineers.

Between 2005 and 2009, the Army Corps of Engineers Louisville Division (USACE) issued four permits or authorizations pursuant to Section 404 of the Clean Water Act, to three companies which at the time were wholly owned subsidiaries of Phoenix Coal Corporation, which is owned by Elgin Mining. Those permits were issued to Charolais Coal No. 1,LLC; C&R Coal Company, Inc. (2 permits); and Crittenden County Coal, Inc. (the “Permits”). The Permits allowed these companies to discharge dredged or fill material into waters of the United States in conjunction with their surface mining operations located in Muhlenberg and Crittenden counties. The Permits provided that the companies had to comply with certain conditions specified in the Permits. Among the conditions were requirements that the permit holders provide mitigation by restoring or establishing additional streams and wetlands to replace the streams and wetlands lost as a result of the mining activities. The United States alleged that the current permit holders, all wholly owned subsidiaries of Elgin Mining, failed to perform the required on-site mitigation which resulted in the loss of aquatic resources. Specifically, streams, wetlands and open waters were filled in with soil and mining overburden, and mitigation to replace the lost aquatic resources was never completed.

All parties agreed that Elgin Mining would pay $3,071,292.00 to the Kentucky Department of Fish and Wildlife Resources’ (KDFWR) Wetland and Stream Mitigation In-Lieu-Fee Program, which provides mitigation credits for impacts to Kentucky’s wetlands and streams associated with discharges of dredged or fill material. Elgin Mining is also required to pay a civil penalty of $150,000 to the United States.

The KDFWR Wetland and Stream Mitigation Program administers funds to provide a consistent and successful approach to fulfill compensatory mitigation obligations required under Department of the Army permits issued pursuant to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act. A Section 404 permit from the USACE is required for activities resulting in the discharge of dredged or fill material into waters of the United States, which include streams, wetlands and open waters. The purpose of the mitigation is to compensate for the loss of aquatic functions within a defined watershed or regional area. The Kentucky Wetland and Stream Mitigation Fund is supported by sales of mitigation credits to permittees to satisfy regulatory requirements. The monies generated are used to implement projects to restore (rehabilitate or reestablish), establish, enhance, and preserve aquatic resources in Kentucky for the benefit of its citizens.

This agreement constitutes a compete and final settlement of all civil claims for injunctive relief and civil penalties against Elgin Mining under Section 404 of the Clean Water Act concerning the mitigation requirements of the Permits.

This case was prosecuted by Assistant United States Attorney Benjamin S. Schecter, Trial Attorney Paul Cirino with the U.S. Department of Justice’s Environmental Defense Section, and was investigated by the Regulatory Branch and Office of Counsel of the Army Corps of Engineers Louisville District.

Updated December 15, 2014