In order to bring the company into compliance with the CleanWater Act, Southern Coal Corp.will pay almost $6 million for upgrades and penalties as a part of a settlementwith the U.S. EPA and the U.S. Department of Justice.
According to a federal release on Sept. 30, the company willbe made to spend $5 million towards comprehensive upgrades at its mining andprocessing operations to "prevent discharges of polluted wastewater fromtheir mines in Appalachia."
Additionally, the company will pay a civil penalty of$900,000, which will be split between the federal government and Alabama,Kentucky, Tennessee and Virginia.
The settlement is in response to "alleged violations ofstate-issued Clean Water Act National Pollutant Discharge Elimination Systempermits by illegally discharging various pollutants" and "violationsof the companies' legal responsibilities to sample the quality of theirdischarges to rivers and streams."
Specifically, the government found that Southern hadviolated discharge limits for "iron, total suspended solids, aluminum, pHand manganese" as outlined in state permits and "failed to submitcomplete and timely discharge monitoring reports, made unauthorized dischargesand failed to respond to EPA requests for information."
"This settlement is designed to bring the companiesinto compliance with the Clean Water Act and requires actions that shouldprevent future violations," said John Cruden, assistant attorney generalfor the Justice Department's Environment and Natural Resources Division. "Weappreciate our state partners working with us on the consent decree and fortheir joint oversight efforts with us in the future."
In addition to the nearly $6 million in costs to thecompany, Southern will be obliged to establish a $4.5 million letter of creditand a standby trust to guarantee compliance with the Clean Water Act and tocomplete the work outlined in the agreement should Southern and its affiliatesfail to do so.
In addition to the financial penalties and letter of credit,Southern and its 26 affiliates will be responsible for "implementing acompany-wide, EPA-approved environmental management system," maintaining adatabase to track progress and violations, provide targeted training and otherefforts intended to help the company avoid further violations of the water act.
Southern Coal is owned by Jim Justice, who is the Democraticcandidate for governorin West Virginia.
In a statement to S&P Global Market Intelligence,Southern Coal spokesman Tom Lusk called attention to progress made in reducingviolations and continuing work with the federal government to improve further.
"After two years of working closely with the EPA we arepleased that an agreement has been reached, and Southern Coal will continueworking with state and federal regulators to maintain our current 99.8 %compliance rate and implement additional best practices in environmentalmanagement to reach 100% compliance," Lusk said. "When Southern Coaltook over some of these struggling coal operations, we knew there wereviolations we would have to catch up on, and we are doing it. While the Obamaadministration has been tough on our industry in these difficult times forcoal, we are focused on striking a balance with full regulatory compliance andkeeping our coal miners working."