Bank of America Corp., one of the world's largest banks, established a policy Dec. 3 to stop financing coal companies that produce half or more of their coal through mountaintop mining.

"Bank of America is particularly concerned about surface mining conducted through mountain top removal in locations such as central Appalachia," reads one part of a "Coal Policy" posted on the bank's Web site.

"We therefore will phase out financing of companies whose predominant method of extracting coal is through mountain top removal," the policy continues. "While we acknowledge that surface mining is economically efficient and creates jobs, it can be conducted in a way that minimizes environmental impacts in certain geographies."

The move follows a campaign by the Natural Resources Defense Council and Rainforest Action Network aimed at persuading the nation's large banks to stop backing the mining and burning of coal.

Bank of America's mountaintop mining policy was a management-level decision and was not generated by shareholders, according to media relations Senior Vice President Colleen Haggerty.

"It really came from our top management, from (CEO) Ken Lewis on down, of being open to looking at different alternatives," Haggerty said.

The bank isn't telling its coal clients how to run their businesses, she said. But, she added, Bank of America will continue its relationships with companies that reduce their production below 50 percent.

Although Haggerty said Bank of America prepared its policy in consultation with its coal clients, one client, International Coal Group, found the decision "disconcerting," according to an e-mailed statement from spokesman Ira Gamm.

"It appears that Bank of America is acting on the basis of biased and superficial information provided by organizations with the end goal of stopping all coal mining," Gamm wrote. "Their decision shows remarkable disregard for an industry that provides the nation with half of its fuel for electrical generation, and should have a chilling effect on other industries that occasionally find themselves in disfavor with environmental activists."

Who Is Affected?

West Virginia Coal Association President Bill Raney did not know which companies operating in West Virginia might be affected by Bank of America's policy.

Haggerty would not say how many or which companies are affected.

However, the bank participates in loans to seven major companies involved in mountaintop mining, according to an Associated Press review of Securities and Exchange Commission filings.

In addition to ICG, those include Alpha Natural Resources, Arch Coal, Consol Energy, Foundation Coal Holdings, Massey Energy Co. and Patriot Coal Corp.

Which, if any, of these meet the policy's "predominant method of extracting coal" criterion is less clear.

Annual reports from 2007 show at least two getting more than half of their coal production from some type of surface mining: ICG of Scott Depot at 62 percent and Richmond, Va.-based Massey at 53 percent.

St. Louis-based Patriot Coal may be in that category as well. Patriot acquired significant surface mining operations when it bought Magnum Coal earlier this year, but information about those mines does not yet appear in the company's detailed reports.

Even if the companies get more than half of their coal through surface mining, they may not get half specifically through mountaintop mining practices.

None of the three returned a call on the subject.

What Is the Scale?

Hill & Associates coal industry analyst Jim Truman believes the Bank of America policy will have minimal effect.

"Very few if any (coal producers) currently get over half of their production from mountaintop operations," Truman said.

"Even if other banks were to apply the same rules," he added, "the impact would be the same."

Haggerty disagreed.

"We're going to do what we do in this, we're not going to please everybody," she said. "We're optimistic that this policy will help move some players in the mountaintop removal space to look at cleaner alternatives."

Truman thought the real value of the policy may lie more in public relations than in its power to change mining practices.

"(Bank of America's policy is) an easy way to sound very green to the public," he said. "Not that it's rocket science or anything, but the general public probably wouldn't have the resources to get to the numbers in a hurry that would show that it might not impact very many companies."

Larger Ramifications?

Truman also thought it was a sign of the times.

"As we get into next year there may be more of that kind of thing -- with the Obama administration coming in," he said.

Rainforest Action Network hopes so.

The group praised Bank of America's policy and called on Citigroup, J.P. Morgan Chase and other banks to follow its example.

And what if they did?

Raney said banks that are considering such a move should consult with groups like the West Virginia Coal Association.

"We're hopeful there's going to be a much more deliberate approach to this thing," he said. "Let's take a look at ... why is it they have a problem with it. That's never been articulated to me, and I don't know that the Bank of America in any of their documents indicates why it is, other than somebody showed up at their office and said, 'Will you do this?'"