The Colowyo coal mine in northwestern Colorado avoided a shutdown, saving hundreds of jobs and millions of dollars for the local economy.

A Colorado coal mine slated for closure due to a technicality has gotten a reprieve from the federal government in a move that could save hundreds of jobs.

The Colowyo coal mine, which has provided hundreds of jobs and millions of dollars to the economy of the city of Craig and the northwestern region of the state since 1977 was in danger of being closed because a renewal permit drafted eight years ago did not take into account the mine's impact on climate change. An environmental group sued in a bid to invalidate the permit. A court-ordered review by the Department of the Interior and an environmental assessment by the Office of Surface Mining Reclamation and Enforcement (OSM) found there was no significant environmental impact and validated the permit.

“We are grateful to the staff at the Office of Surface Mining and the other cooperating agencies for their diligence and hard work to complete the environmental review within the short timeframe ordered by the judge,” Mike McInnes, chief executive officer of Tri-State Generation and Transmission Association, which owns Colowyo Mine, said in a released statement provided to FoxNews.com.

“The unwavering support we have received from our 220 mine employees, the community and elected officials across Colorado helped ensure the Department of the Interior…committed the resources and time necessary to complete this important work,” he added.

“People have been putting off big decisions until this was settled.  Buying homes as opposed to renting. Car purchases and so on. Now they will be able to move forward with their lives.”

- John S. Kinkaid, Moffat County Commissioner

It was a close call for the mine, whose problems began in February 2013 when environmental group WildEarth Guardians filed a lawsuit against OSM, claiming that its original assessment of Colowyo in 2007 did not take climate change into account, and in turn, violated the 2006 National Environmental Policy Act. In May of this year, a federal judge agreed and gave the agency 120 days to redo the review.

“The American public deserves an honest accounting of the environmental impacts of coal mining, including the climate impacts of burning coal, so we can be assured the right decisions are made,” WildEarth Guardians spokesman Jeremy Nichols told FoxNews.com at the time. “The Interior Department has 120 days to do this analysis, which they were required to do in the first place under federal law, and there's no reason to believe they will not meet this deadline. It's unfortunate that the Interior Department's mistakes have created this situation, but thankfully, they're rising to the challenge.”

Nichols told FoxNews.com that WEG likely will not challenge the decision and praised the federal agencies involved.

“The U.S. Interior Department rose to the challenge here to fix its mistakes and met the court's deadline,” he said in a statement. “We're pleased they followed through and gave the American public an honest accounting of the environmental impacts of coal mining, particularly the greenhouse gas emissions associated with burning coal.

“The fight's not over, the Interior Department needs to start to keep our coal in the ground and stop rubber-stamping more mining, but this is an important first step in the right direction,” he also said, “but we do intend to continue to push the agency to rein in coal mining and ultimately end the federal coal program."

Those in the region have maintained that closing Colowyo would have placed economic hardship in northwest Colorado, an area already experiencing trouble.

“We have yet to recover from the great recession,” Moffat County Commissioner John Kinkaid told FoxNews.com. “The decision means that our economy won't collapse.

“People have been putting off big decisions until this was settled," Kinkarid said."Buying homes as opposed to renting, car purchases and so on. Now they will be able to move forward with their lives.”

While Colowyo dodged a bullet, WEG has filed a similar suit against the Trapper Mine.

Perry Chiaramonte is a reporter for FoxNews.com. Follow him on Twitter at @perrych