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Arch moves to finalize sale of Ky. mines with bankruptcy court approval

Afterfiling for bankruptcyprotection in January, Arch CoalInc. has moved to rid itself of inactive assets with the sale of acollection of abandoned mines and other assets in Knott County, Ky. While thesale closed on April 12, Arch is now seeking approval from the U.S. BankruptcyCourt for the Eastern District of Missouri, Eastern Division.

Thesale of those assets controlled by ICGKnott County LLC to Quest Energy Inc. included in an April 13filing to the court would include three prep plants in addition to elevenabandoned mines.

Accordingto data provided by the U.S. Mine Safety and Health Administration, mineslisted as a part of ICG Knott County include the Elk Hollow mine, Calvary mine,Apollo mine, Clean Energy mine, Classic mine, Raven mine #2, Raven mine #1,Apollo mine, Slone Branch, Kathleen and Lige Hollow mines.

Allthese mines are listed as abandoned.

Accordingto the filing, the sale would provide Arch additional benefit as Quest wouldtake on "significant reclamation liabilities as part of the Knott Countrysale."

Latelast year, Quest Energy purchased the Central Appalachia Deane mining complexfrom Rhino Resource Partners LP,freeing the seller from significant reclamation liabilities and bondingrequirements.

Theability of ailing coal producers to meet reclamation obligations has receivedincreased scrutiny in recent months as the number of companies seekingbankruptcy protection has grown. Arch's capability to address its ownobligations was challengedby an environmental advocacy group in bankruptcy court, with a focus on aself-bonding agreement with the state of Wyoming.

Ahearing date for the sale has been set for May 11. Any objection to the motionfor approval must be filed by May 4.

ArchCoal and Quest Energy could not be reached for comment on the sale.