HELENA – Montana regulators have unanimously approved a settlement that seeks to end a years-long battle over the proposed expansion of a coal mine in central Montana.

The Montana Board of Environmental Review on Tuesday OK'd a deal that allows Signal Peak Energy to proceed with an often-criticized expansion of its operations at the underground Bull Mountain Mine.

The seven-member, governor-appointed panel posed no questions and made only minor tweaks to language included in the agreement, one board members lauded as a fair deal for environmentalists and coal miners alike.

Discussion ahead of that vote cut a sharp contrast with testimony heard only hours earlier at the state Capitol, where the settlement provoked a nearly two-hour back-and-forth between state officials and environmentalists speaking in front of Montana’s Water Policy Interim Committee.

The deal is meant to avert a threatened shutdown of most of Signal Peak’s operations at Bull Mountain, where a state panel in 2013 rejected expansion plans environmentalists said could contaminate nearby water supplies. The company had threatened to lay off about two-thirds of its employees if those plans weren't allowed to go ahead.

An eight-member committee of state legislators took no action for or against the planned expansion Tuesday morning, but asked plenty of questions about the legal settlement that will allow it to proceed.

Meanwhile, the Montana Department of Environmental Quality has already started a revised environmental analysis called for under the agreement. That revision is expected to be completed within six months.

Department head Tom Livers didn’t necessarily agree with environmentalists’ characterization of flaws in his agency’s assessment of the mine expansion’s impact on nearby groundwater sources.

He said the DEQ had to pony up $30,000 to settle legal disputes over that assessment with the Montana Environmental Information Center. MEIC attorney Derf Johnson declined to comment on the size of a related settlement his group reached with Signal Peak.

State Sen. Duane Ankney, R-Colstrip, said similar legal arrangements threaten the state’s economic future.

“The market on coal is bad right now, but so is the (market) on cattle,” Ankney said. “Does that mean we take cattle ranchers to court and challenge them?

“As long as we allow these groups to sue and settle, we’re going to put this state out of business.”

Signal Peak cut about 20 percent of its workforce last month amid a continued downturn in the coal market. Arch Coal Inc., the nation’s second-largest coal company, plans to file for bankruptcy protection on Monday.

MEIC attorney Johnson said his group is also concerned with a state report on environmental conditions at Rosebud Mine, in Colstrip.

Johnson did not rule out legal action over those concerns.

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