A coal company has agreed to pay $250,000 for mining around streams in Pike County without a permit.
The mining was discovered last spring by members of the Sierra Club and Kentuckians for the Commonwealth, who went to see an area where a mining permit had been applied for and found that work already had started.
In the area near Millers Creek north of Fishtrap Lake, rock had been dumped into valleys, sediment ponds had been created and partial reclamation had begun.
A spokesman for Clintwood Elkhorn Mining, which is a subsidiary of TECO Energy, said at the time that the company had discovered its error and reported it to federal authorities before the environmentalists noticed.
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In September, the environmental groups sued the company, saying it had violated the Clean Water Act.
A consent decree, or settlement, filed Wednesday in U.S. District Court in Pikeville calls on the company to spend most of the settlement amount on restoring part of Hurricane Creek in Pike County. Attorneys for the environmental groups will receive $5,500 of the $250,000.
"It's a shame that the state couldn't enforce the law and keep TECO from further destroying our land and streams," said Doug Justice, a Pike County resident.
The environmental groups agree not to object if Clintwood Elkhorn applies for a permit to mine the original spot. Spokesman Rick Morera said the company is pleased the lawsuit was settled.
The U.S. Environmental Protection Agency has 45 days to review the settlement. If it does not object, a federal judge will be asked to sign off on the deal.
Hurricane Creek is part of the Levisa Fork Watershed.
It was identified by the Kentucky Department of Fish and Wildlife Resources as a waterway that has siltation and other problems.
Part of the restoration work will include restoring natural meanders and planting trees and shrubs along the banks. Fish and Wildlife may contribute an additional $750,000 to the project using a fund for that purpose, subject to approval of the board that controls the fund.