Report: Deal reached to avert shutdown of Signal Peak coal mine in Montana

The Associated Press reported Jan. 11 that a deal has been reached, and would be up for approval on Jan. 12 by a Montana board, that would keep the Signal Peak Energy longwall coal mine in operation.

The deal comes after a state review panel rejected an expansion permit granted to the Bull Mountain Mine in 2013, said the report. The panel said a Montana agency failed to consider the mine’s long-term potential to contaminate water supplies used by nearby ranches and residents. This new agreement gives state regulators six months to look again at the effects from the underground mine.

“We don’t want to see anyone (at the mine) lose any work, but our big interest is to protect water resources, which is important to other people’s work,” said attorney Shiloh Hernandez, who represents the Montana Environmental Information Center. “We reached some common ground here.”

Signal Peak spokesman Mike Dawson said the agreement should allow the company to avert a production shutdown, the AP report said. “It gives us a pathway forward that we’re pleased about,” Dawson said.

The Montana Board of Environmental Review still must approve the deal and will consider it on Jan. 12. The agreement allows expansion development work to proceed, which is scheduled to begin in March.

The state’s original analysis of the expansion concluded that no contaminated water would leave the mine area for 50 years after mining was completed. But Montana laws place no time limit on the threat contaminated water poses to streams or to water used by homes and ranches near the mine.

The Montana Department of Environmental Quality expects to complete its revised analysis within the six months called for in the agreement, Director Tom Livers said. The agreement says Signal Peak must cease all expansion work if a new permit is not issued in that time.

Signal Peak produced 7.9 million tons in 2014 and 6.4 million tons in 2015, according to data from the U.S. Mine Safety and Health Administration.

After some Dec. 31 layoffs, the company expects to scale back production to 5.5 million tons annually until market conditions improve, Signal Peak President Brad Hanson has said.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.