Signal Peak Energy

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Signal Peak Energy is based in Montana and is the operator of an underground Signal Peak Mine in Musselshel County, Montana, that opened in September 2009. Formerly known as the Bull Mountain mine, Signal Peak Mine has newly built access to the Burlington Northern Santa Fe (BSNF) 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]

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.[6]

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[7]

February 2012: Signal Peak Energy wins BLM coal lease bid

In February 2012 the BLM accepted a $10.6 million coal-lease from Signal Peak Energy to develop a coal track near Roundup, Montana. The company's earlier bid of $5.3 million had been rejected. The tracks are near the company's Bull Mountain Mine holdings.[8]

August 2012: Coal opponents chastise land board

In August 2012 the Montana Land Board agreed to take public comment on the $3.5 million bid received from Signal Peak Energy to lease more state coal at the mine site. Several coal opponents coal opponents argued at the board meeting that the elected officials should do more to stop coal development.[9] Additionally, Signal Peak it was reported in August 2012 that faced tough financial times as natural gas remained cheap and exports to Asia faced resistance in Western states.[10]

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.[11]

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.[12]

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References

  1. 1.0 1.1 Signal Peak Mine expected to boost MT coal production, Montana's News Station.com (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. "BLM accepts $10.6M coal-lease bid in Montana,", Associated Press, February 29, 2012.
  7. "Bull Mountain coal mine cleared to resume some mining" Clair Johnson, July 28, 2011.
  8. "BLM accepts $10.6M coal-lease bid in Montana" Associated Press, February 29, 2012.
  9. "Coal opponents chastise land board" Associated Press, August 3, 2012.
  10. "Lump of Coal: Promising Mine Deal Hits Headwinds" ProPublica, August 6, 2012.
  11. "Deal would transfer Mont. coal tracts to Texas company, allow tribe to consolidate reserves" Associated Press, March 23, 2011.
  12. "Interior Department says tribal coal swap not even" Associated Press, June 22, 2011.

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