TORONTO (miningweekly.com) – The recent approval of an openpit coal-mining permit for Arch Coal's Pine Creek mine, in West Virginia, does not change the fact that it is almost impossible to get permits in Central Appalachia at the moment, Arch CEO Steven Leer said on Friday.

The Environmental Protection Agency is cracking down on so-called mountain-top mining, and announced last year that 79 proposed surface coal-mining projects had been identified for further, detailed reviews of their pending permits, after an initial review concluded that all 79 projects, in four states, would likely cause water quality impacts.

The Pine Creek permit, approved this month, is just the second to be issued in West Virginia since then; Patriot Coal received permission for its Hobet mine in January this year.

To get the permit, Arch agreed to a number of changes to the operation, as well as some environmental remediation measures.

These included near-site stream restoration and enhancement, on-site stream re-establishment, near and on-site stream creation, and both stream and upland forest preservation.

“It was a long, drawn-out negotiation, it was very difficult,” Leer commented.

Arch believes that the permitting system in Central Appalachia will remain extremely limited, he said.

“You may see a permit or two squeeze through the system but there is simply no indication that many of the permits are going to be released.”

The situation will likely become increasingly “acute” for the industry into 2011 and 2012, Leer said.

“And normally what you see happen, is that people go back and mine higher reserve ratios, because they are trying to keep their mines open, and that raises their costs.

“And then at some point, you simply don't have anywhere to go, and you end up closing the mine,” he commented.

“So it was nice to get the permit. It was a difficult process, we think that we gave a great deal in that process.”

“And for the next one, I wouldn't expect it to be easier.”

Earlier this month, the National Mining Association, which represents the big US coal miners, filed a lawsuit against the EPA, alleging that it was unlawfully obstructing permits for coal operations in Central Appalachia.

Mountain-top mining, commonly used in Appalachia, involves the top of a mountain being removed by blasting, to expose underlying coal seams.

Excess rock and soil is often dumped in nearby valleys and streams and critics say the process pollutes rivers and water supplies.

Arch produces mainly steam coal, but also some metallurgical products too, from 11 mining complexes in Central Appalachia, the Powder River basin and the Western Bituminous region.

Shares in the company rose 5,3% on Friday, after the company posted strong earnings for the second quarter and said it expects the second half of the year will be even better than the first.