Phoenix Coal Inc. secures permits for Radio Hill section of Briar Hill surface mine

    LOUISVILLE, KY, Jan. 8 /CNW/ - Phoenix Coal Inc. (TSX: PHC) ("Phoenix" or
"the Company"), a leading producer and consolidator of thermal coal reserves
in the Illinois Basin, announced today the Company has received a permit
granted by the United States Army Corps of Engineers ("COE") under Section 404
of the Clean Water Act ("404 Permit"). With the 404 Permit, the Company has
now secured all of the necessary permits to begin mining on the Radio Hill
section of the Briar Hill surface mine ("Radio Hill") in Muhlenberg County,
Kentucky, effective immediately. During December 2008, Phoenix obtained a
permit required under Section 401 of the Clean Water Act ("401 Permit") and a
permit granted by the Kentucky Division of Surface Mining Reclamation and
Enforcement ("DSMRE Permit") for Radio Hill.
    Mine development work has already commenced at Radio Hill, and the
Company expects coal production to begin in February. The mine is expected to
reach full production by April after an initial ramp-up period and contribute
approximately 500,000 tons of production in 2009.
    "Securing this permit represents an important step in our efforts to
increase our production levels and meet our contractual commitments to our
customers," said David A. Wiley, President and CEO of Phoenix Coal. "However,
until all outstanding permits are secured we remain in a state of force
majeure and will continue to work diligently to obtain the remaining permits
for the KO and Winn North properties."

    About Phoenix Coal Inc.

    Phoenix Coal Inc. is an integrated mining operation producing high
sulphur, low chlorine, bituminous coal from the Illinois Basin. To address the
increasing demand for energy in the Eastern US as well as in the export
market, Phoenix Coal is pursuing production growth through the focused
acquisition, consolidation, and extraction of coal assets. Phoenix Coal
currently operates four surface coal mining operations in Muhlenberg County,
Kentucky and a barge loading facility on the Green River. Development plans
for additional surface operations, as well as an underground mine, are
underway. The Company's executive offices are located in Louisville, KY and
its operational headquarters are stationed in Madisonville, KY.


    Certain information set forth in this press release contains
"forward-looking statements", and "forward-looking information" under
applicable securities laws. Except for statements of historical fact, certain
information contained herein constitutes forward-looking statements which
include management's assessment of Phoenix's future plans and operations and
are based on Phoenix's current internal expectations, estimates, projections,
assumptions and beliefs, which may prove to be incorrect. Some of the
forward-looking statements may be identified by words such as "expects"
"anticipates", "believes", "projects", "plans", and similar expressions. These
statements are not guarantees of future performance and undue reliance should
not be placed on them. Such forward-looking statements necessarily involve
known and unknown risks and uncertainties, which may cause Phoenix's actual
performance and financial results in future periods to differ materially from
any projections of future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties include, but are not
limited to: liabilities inherent in coal mine development and production;
geological, mining and processing technical problems; Phoenix's inability to
obtain required mine licenses, mine permits and regulatory approvals required
in connection with mining and coal processing operations; dependence on third
party coal transportation systems; competition for, among other things,
capital, acquisitions of reserves, undeveloped lands and skilled personnel;
incorrect assessments of the value of acquisitions; changes in commodity
prices and exchange rates; changes in the regulations in respect to the use of
coal; the effects of competition and pricing pressures in the coal market; the
oversupply of, or lack of demand for, coal; currency and interest rate
fluctuations; various events which could disrupt operations and/or the
transportation of coal products, including labor stoppages and severe weather
conditions; the demand for and availability of rail, port and other
transportation services; and management's ability to anticipate and manage the
foregoing factors and risks. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements. Phoenix
undertakes no obligation to update forward-looking statements if circumstances
or management's estimates or opinions should change except as required by
applicable securities laws. The reader is cautioned not to place undue
reliance on forward-looking statements.

    The TSX has neither approved nor disapproved of the contents of this
    press release.

For further information:

For further information: Joanna Longo, The Equicom Group, Investor
Relations, (416) 815-0700 ext. 233,

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