Signal Peak Coal Mine near Roundup is “in jeopardy”, President and CEO of Signal Peak, Parker Phipps, told Yellowstone County Commissioners last week. And, if it is in jeopardy, so are the jobs of its 260 workers – two thirds of which live in Yellowstone County. And, so are the approximately $211 million in taxes the company paid over the past three years to Yellowstone and Mussellshell Counties.
Mining operations will have to cease at the end of 2025, given the decree from US District Judge Donald Malloy, said Phipps. Judge Malloy issued an order in February 2023 prohibiting any expansion of the mine onto federal land, until another environmental impact study is done, as well as an analysis of impacts of greenhouse gases.
Not only does the suspension of its permit to mine federal coal impact the expansion into federal coal areas, but it blocks access to areas in which there is state coal deposits. “A lot of the coal is not federal coal,” said Phipps.
A report in Yellowstone County News from a year ago, stated that the Judge ruled the U.S. Office of Surface Mining Reclamation and Enforcement (OSM) made “sufficiently serious” errors in their original analysis of Signal Peak’s expansion. The Enforcement Office “did not account for the emissions generated by coal combustion, obscuring and grossly understating the magnitude of the Mine Expansion’s emissions relative to other sources of greenhouse gases.”
Judge Malloy said that the additional studies shouldn’t take more than two years, but as that time frame diminishes and no study has been done, Signal Peak has filed suit against OSM. Phipps said “It’s difficult for me to believe that the office can’t get their work done in a timely fashion . . . it appears almost intentional.”
County Commissioner John Ostlund said he agreed, “…with this administration it appears to be intentional.” He said that “they need to follow the same rules and the same playing fields as we do,” and suggested the company should sue. “…if you need to sue then I would be an advocate,” said Ostlund.
Phipps said that the company plans to continue to fight and that they appreciate the county commissioners’ support. “Your support will be an opportunity for input from the people.”
A number of complaints and suits have been filed against Signal Peak by such activist groups as Earthjustice, Western Environmental Law Center, Montana Environmental Information Center, and Northern Plains Resource Council (NPRC). The groups claim Signal Peaks is “failing to comply with permit requirements to reclaim lands affected by subsidence.”
The situation is not one in which the company can halt mining temporarily and then resume again, explained Phipps. Signal Peaks, which ships 99 percent of its coal to Asia, would lose most of its contracts for coal, as well as access to freight and port services that are highly competitive and not easy to regain once lost.
Signal Peak Energy and its Bull Mountain Mine which straddles the Yellowstone County and Musselshell County border about 40 miles north of Billings, each year mines 8 to 11 million tons of coal.
The mine has 260 employees, of which two-thirds live in Yellowstone County. On average their employees earn $135,000 a year in wages and benefits. According to Vice President and Comptroller of the company, Cliff Pinkerton, who was also at the meeting with the commissioners, the company pays $45 million annually in wages, taxes and benefits for employees.
In 2022, Signal Peak paid $4,669,000 in gross proceeds tax to Yellowstone County, and in 2023, Signal Peak paid $9,491,000. It’s estimated the total paid in 2024 will be $5,100,000.
Other taxes paid to the state and federal governments, as well as Musselshell County, generated a total of almost $86 million in 2022 and $92.5 million in 2023. Because some of the coal is on school trust land, revenues paid by Signal Peak sent $47 million over the past three years to K-12 public education in Montana.
“Those totals will be zero in 2024 and 2025 if the mine closes,” said Pinkerton.
Signal Peak Energy operates the Bull Mountains Mine No. 1 in Musselshell and Yellowstone counties in eastern Montana. The Company is jointly owned by the Boich Cos, FirstEnergy Corp. and the Gunvor Group. The Mammoth Seam is the primary coal seam at the mine and is one of the largest contiguous coal seams in North America. The Company anticipates mining 8 to 11 million raw tons of coal per year through the life of the mine. The owners of signal Peak Energy also formed a separate entity, Global Rail Group that operates a 36-mile rail spur to handle transportation of the coal to Broadview connecting with the BNSF mainline railroad.
