Citing "internal miscommunication," the U.S. Department of the Interior has backtracked when it said a Colorado mining company could expand its Montana mine.

Earlier this week, it was reported that Westmoreland Coal Company's Rosebud coal mine in southeastern Montana would be allowed to expand by the U.S. Department of the Interior.

But that wasn't correct. An Interior Department spokesperson told the Billings Gazette that "a previous statement by the Department that it had approved the expansion of the mine was incorrect and was the result of an internal miscommunication."

The initial news that the mine expansion was approved sent struggling Westmoreland Coal's shares (Nasdaq: WLB) soaring more than 10 percent in Tuesday trading.

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