Signal Peak Mine

From Global Energy Monitor

The Signal Peak Mine is an underground coal mine in Musselshel County, Montana, that opened in September 2009. Formerly known as the Bull Mountain mine, Signal Peak is operated by Signal Peak Energy and has newly built access to the Burlington Northern Santa Fe railroad that leads to the BNSF's main rail line in Broadview, Montana. The 35 mile line was built at a cost of $105 million.[1]

The Boich Group and FirstEnergy invested $400 million to reopen the mine, which will produce an estimated 12.5 million tons of annually by the end of 2010. On December 3, 2009 the companies announced that they planned to sell much of the coal to growing Asian markets.[2] Additionally, FirstEnergy has a 15-year contract to buy up to 10 million tons of coal annually from the mine and has tentative contracts with rail haulers. The FirstEnergy coal will supply four power plants along Lake Erie and be marketed to other power plants in Ohio and Pennsylvania.[3]

According to Montana Governor Brian Schweitzer at the mine's reopening: "This is a mine that will add 25 percent to the overall coal mining that we do in Montana."[1]

September 2010: Coal Mine Cited for Safety Violations

In 2010 three Montana mines have were cited with dozens of safety citations as federal officials step up enforcement against mines that have had repeated problems.

Officials cited the Stillwater platinum mine for 11 violations; Signal Peak Mine, which produces coal, for 44 violations; and Revett Mineral's Troy silver mine for 24 violations.

The citations detailed 21 problems that inspectors said could cause serious injury or illness. The mines drew scrutiny because of past problems, Mine Health and Safety Administration stated.[4]

April 2011: Feds open lands to mining leases

On April 20, 2011 the BLM it would sell leases for more than 61 million tons of coal in central Montana. The leases on 2,680 acres near the Signal Peak Mine, will be auctioned in a competitive sale the summer of 2011. The sale would open an additional 72 million tons of private and state coal reserves to potential mining operations.[5]

July 2011: Signal Peak Mine forced to halt mining after roof falls

The Signal Peak Mine coal mine near Roundup was closed by federal Mine Safety and Health Administration in late July 2011 after the mine experienced three falling roofs. Several days later the mine was allowed to resume some operation while the roof was fixed.

John DeMichiei, president and CEO of Signal Peak Energy, which owns the mine, stated that two of the roof falls happened because mining was occurring in an area where the ground cover is 800 feet thick, or about double normal ground cover. The weight of the cover may caused the roof falls, DeMichiei stated[6]

October 2011: Swiss company buys into Signal Peak Mine

In October 2011 Pinesdale LLC, a subsidiary of Swiss based Gunvor Group Ltd., paid $400 million for one-third ownership in the Signal Peak Mine. Gunvor announced plans on boosting the underground production from a stated 9 million tons a year to about 15 million tons and ship the coal to Pacific and Asia markets through Westshore Terminals in Vancouver, British Columbia. It was the company's first investment in a U.S. coal mine.[7]

November 2011: FirstEnergy sells stake in Montana coal mine to Gunvor Group unit

It was announced in October 2011 that FirstEnergy sold a portion of its stake in Montana's Signal Peak coal mine to a unit of worldwide independent commodity trader Gunvor Group for $260 million. The transaction allows FirstEnergy to retain one-third ownership in Signal Peak along with Boich Group, another Ohio company that bought the mine in a joint venture with FirstEnergy.[8]

November 2011: BLM rejects Signal Peak coal bid

On November 16, 2011 the BLM rejected the only bid for the Signal Peak mine. The bid did not meet or exceed BLM's estimate of the fair market value of the tracts. Signal Peak Energy LLC submitted the high bid of $5,325,000 for five unleased coal tracts. The BLM offered the tracts for sale in response to Signal Peak's coal lease application.[9]

February 2012: BLM accepts new Signal Peak bid

In February 2012, federal officials accepted a $10.6 million bid from Signal Peak Energy for 35.5 million tons of publicly-owned coal near Roundup, Montana. The company's previous $5.3 million offer was rejected as insufficient. Signal Peak was the sole bidder in the November 2011 lease sale. After that rejection, the company asked the BLM to hold another sale. The BLM said that this time, the $10.6 million bid "met or exceeded" the fair market value. The coal tracts are in the path of Signal Peak's Bull Mountain Mine and considered a key component of its mining plan.[10]

May 2012: New leases welcomed by Montana Land Board for Bull Mountain Mine

In May 2012 the Montana Land Board announced that they supported increasing the leases for coal to be mined at the Bull Mountain Mine.[11]

Signal Peak shut down

In early December 2011 the Signal Peak mine was shut down because of high levels of carbon monoxide detected in the mine. The mind remained closed for three weeks. On December 23, 2011 Signal Peak Energy spokesman Mike Dawson said that nitrogen pumped into a portion of the mine had lowered concentrations of the gas to safe levels, allowing mining to presume.[12]

Congressional Deal Would Transfer Coal Tracts to Texas Company

On March 23, 2011, the federal government stated that it would give an estimated 145 million tons of publicly owned coal to Great Northern Properties based in Houston, Texas under an exchange backed by members of Congress that calls for future royalties and other coal reserves to go to the Northern Cheyenne Tribe. Supporters stated that the deal would likely accelerate mining in Montana and deliver "tens of millions" in revenue to the impoverished tribe.[13]

In June, 2011 a top Interior Department official questioned the proposal to transfer 232 million tons of publicly owned coal to a private company under an exchange touted as benefiting Montana's Northern Cheyenne tribe. Great Northern Properties stands to get almost twice as much coal as it would give the tribe in the proposed deal, although not all the fuel the company received could be mined. The company and tribe also would share tens of millions of dollars in future coal royalties. Interior Department Deputy Assistant Secretary Jodi Gillette said an appraisal is needed to ensure the two sides get equal value out of the swap. Even if it's done fairly, the state and federal government stand to lose any royalties, Gillette said.

The deal is backed by leaders of the impoverished tribe, Montana's congressional delegation and Signal Peak Energy, a 2-year-old underground mine near Roundup owned by Ohio-based Boich Group and power company FirstEnergy Corp.. Montana Rep. Denny Rehberg warned Wednesday that opposition from Interior "could blow up the deal" and threaten the future of Signal Peak. Great Northern acquired rights to the coal beneath the reservation from Burlington Northern Railroad in 1992. Tribal leaders say those rights should have been turned over to the Northern Cheyenne in 1900, when the reservation was expanded to include the land above the underground reserves but not the coal itself.[14]

Mine Data

  • MSHA ID:
  • Operator: Signal Peak Energy
  • Controller: Boich Group and FirstEnergy
  • Union:
  • County: Musselshel
  • State: Montana
  • Latitude:
  • Longitude:
  • 2007 Production (short tons): estimated 12.5 million tons
  • Coal Type:
  • Mining Method: Underground
  • Mine Status: Active
  • Average No. of Employees: 200

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  1. 1.0 1.1 Signal Peak Mine expected to boost MT coal production, Montana's News (CBS), accessed December, 4 2009.
  2. U.S miner seeks to boost Asian coal sales, Fitri Wulandari, Reuters, December, 3 2009.
  3. Linda Halstead-Acharya, "Signal Peak Mine south of Roundup nears completion" Billings Gazette, May 19, 2009
  4. "3 Montana mines cited for safety violations" Matt Brown, Associated Press, September 23, 2010.
  5. "61M tons of coal near Roundup to be leased by BLM" Associated Press, April 20, 2011.
  6. "Bull Mountain coal mine cleared to resume some mining" Clair Johnson, July 28, 2011.
  7. "Swiss company with Russian ties buys into Signal Peak coal mine" Jan Falstad, Billings Gazette, October 18, 2011.
  8. "FirstEnergy sells stake in Montana coal mine to Gunvor Group unit", October 18, 2011.
  9. "BLM rejects Signal Peak coal bid" Q2 News, November 17, 2011.
  10. [here: "BLM accepts $10.6M coal-lease bid in Montana,"] AP, Feb. 29, 2012.
  11. "Montana endorses coal lease for Bull Mountain Mine" Billings Gazette, May 21, 2012.
  12. "Mining resumes at Signal Peak; gas levels lower" Associated Press, December 23, 2011.
  13. "Deal would transfer Mont. coal tracts to Texas company, allow tribe to consolidate reserves" Associated Press, March 23, 2011.
  14. "Interior Department says tribal coal swap not even" Associated Press, June 22, 2011.

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