PCX To Pay For Environmental Improvements

Patriot Coal Corporation PCX has had its subsidiaries ordered to pay for environmental improvements, Citigroup reports. Hobet and Apogee were involved in lawsuits with West Virginia courts for failing to comply with selenium limits imposed on those permits in March 2009. Apogee will have to install a $50M fluidized bed reactor system to treat selenium waste by May 1, 2013 and Hobet must submit a treatment plan by October 1, 2010. PCX will have to establish a $45M letter of credit back to the projects, according to Citigroup. Excluding the $50M of capex, Citigroup estimates that PCX will generate -$22M for the rest of 2010. Citigroup maintains its Hold rating and price target of $15. Patriot Coal Corporation closed yesterday at $10.28.