Last year, the Sierra Club and Kentucky Waterways Alliance had challenged a Clean Water Act Section 4040 permit issued to the operator from the Army Corps of Engineers that permitted the construction of four valley fills at the Leslie County surface complex.

ICG had constructed three of the fills and will be able to construct the fourth under the settlement terms which require that the operator plant native hardwood trees on an additional 150 acres of mined land.

The company will also contribute $US50,000 to the Kentucky Fish and Wildlife Foundation for stream improvements to the Middle Fork Kentucky River watershed.

ICG president Ben Hatfield said the company was pleased the case had been resolved.

"We look forward to continue working with the corps to improve the process for reviewing and approving permit applications for both surface and deep mining in a timely manner," he said.

The Sierra Club told the Associated Press the settlement was a victory.

"We feel like we achieved the best possible result given the circumstances, and we are pleased that our challenge to the Army Corps permit has led to a reduction in the number of valleys that will be filled with mining waste," spokesperson Oliver Bernstein said.

He also told the news service the settlement reinforced the importance of taking federal action to end mountaintop mining.

The 70-worker Thunder Ridge mine produced more than 700,000 tons in 2008, according to US Mine Safety and Health Administration data. The operation is part of the company’s ICG Hazard subsidiary.

ICG owns 13 active mining complexes in Kentucky, West Virginia, Maryland, Virginia and Illinois.