Signal Peak Energy’s Bull Mountain Mine has Pulled it Together and is Pulling Ahead
- Published: Thursday, 28 June 2012 12:11
By Lee Buchsbaum, Associate Editor and Photographer
Bituminous coal mining in Montana’s Bull Mountains, 30 miles north of Billings, Mont., began late in the 19th century when western railroads tapped coal from local seams for their hungry steam locomotives.But after the steam era ended, most of Montana’s coal production evolved into subbituminous surface mine-mouth affairs. The harder pocket of bituminous coal hidden in the Bull Mountains waited for its day to come.
Beginning in the 1990s, various innovators and entrepreneurs took long looks at the bituminous coal reserve. A decade ago, investors began putting together the original Bull Mountain mine near Roundup. From day one, the vision was to use longwall techniques to mine the relatively high Btu (10,300), low sulfur Mammoth vein deposit and ship it to developing Asian markets as well as domestic electrical producers. After a few years of scraping along, with skeptics claiming that the Bull Mountain mine was, in fact, little more than a mountain of bull, ownership, leadership and direction changed dramatically.
In 2008, the original partners sold their stake in the mine to a joint venture between FirstEnergy, a large diversified Midwestern energy producing company with a total generating capacity of 23,000 megawatts, and the Boich Companies, established coal marketers from Ohio. FirstEnergy’s initial stake in Signal Peak was only part of the deal: First Energy also had the intent of buying back a majority of the mine’s planned 10 million tons of annual production for use in the electrical producer’s fleet of Midwestern power plants, with the Boich Companies helping to sell the remainder.
At the time, the estimated cost to fully develop the mine into a world-class longwall operation producing to those levels was $450 million, including mine expansion and equipment costs, a new coal preparation plant, and the costs associated with constructing a 35-mile rail spur to the Burlington Northern Santa Fe (BNSF) railway line.
What had long drawn investors to the Bull Mountain reserve was its strategic position and high regional coal quality. Located in west-central Montana, the Signal Peak mine is able to ship to overseas customers, west and east via BNSF. Producing a bituminous sulfur compliant coal superior in calorific value and mercury content to PRB coals surface mined both in Montana and Wyoming (10,300 Btu/lb vs 8,000 to 9,400 Btu/lb in the PRB) and without the sodium contamination of other coals mined in the region, investors knew the coal was saleable. With a reserve base of nearly 1 billion tons, they knew they had plenty to sell.
To the east, export coal is dispatched to Great Lake ports near Duluth, Minn. To the west, BNSF hauls the mine’s coal to Vancouver’s West Shore Terminal at Robert’s Bank. Early to the export party, Signal Peak’s ownership presciently purchased capacity at the now clogged terminal (See Coal Age, March 2012, p. 38) guaranteeing the mine access to the coveted Asian and South American export markets.
From 2008 through 2011, the new owners rebuilt the entire enterprise, both above and below ground. They invested in new equipment, brought in a new operating staff, and began a massive buildout while ramping up production toward that magical 1 million clean tons a month level. But challenges continued, safety standards were not met, and production remained inconsistent. With roof falls, injuries and citations mounting, MSHA warned that the mine was in danger of being hit by a Pattern of Violations charge. At the same time, First Energy announced it had changed direction and was looking to sell some of the stake it held.
On October 18, 2011, FirstEnergy and Boich announced that Pinesdale LLC, a fully-owned subsidiary of the Gunvor Group, Ltd., one of the world’s leading commodity traders, had purchased a one-third interest in the mine for $400 million. “One of the key advantages that Gunvor Group brings to this venture is the ability to utilize their commodity trading relationships in such markets as Japan, China, Korea and Chile to sell more coal,” said Wayne M. Boich, president and CEO, Boich Companies.
While announcing the entry by Gunvor, FirstEnergy also said it was severely curtailing its planned coal off-take from the mine to no more than 2 million tons per year—much less than the 7 million plus annual tons that had been part of the original planning.
Though First Energy’s demand had changed, no reduction in overall production was envisioned—in fact, to serve the growing export market as well as grow domestically, Gunvor, First Energy and Boich were more determined than ever to grow the operation into a safe, low cost, high production longwall mine.
As part of the new agreement, Gunvor entered into a substantial coal purchase agreement with Signal Peak. The tonnage forecast for Signal Peak, including future surface operations, is set to rise to approximately 15 million clean tons per year from the current 9 million tons of expected production. But consistently getting anywhere close to that figure, the partners knew, was going to require deeper fundamental change.
New Team, New Attitudes
As part of Signal Peak’s new direction, a new mine management team, largely made up of industry veterans from Colorado, Utah and Wyoming, the East, and the original Montana managers. Though John DiMichiei still maintains a management position and is coordinating efforts to develop the new surface mine, day-to-day operations of the mine are now coordinated by a team led by new COO Brad Hanson. Hanson, a former vice president at Bowie and veteran of several other high production western longwall mines, has placed an emphasis on improving safety and consistency, increasing maintenance, and producing at world-class standards.
Born into a multigenerational coal mining family in the Colorado coalfields, Hanson started working summers underground when he was 16. Since then he’s mined coal for more than 35 years. “Making the move to Signal Peak and taking on the challenge of getting the mine on track has been one of my toughest experiences yet, but one of the most rewarding. Now we’re in the next phase of fine tuning and building our team to reach or exceed the numbers in our business plan that many believed we’d never be able to achieve: 1 million tons or more a month, every month,” said Hanson.
When Hanson was recruited to Signal Peak, he brought along a few of his former senior staff members at the Bowie mine in Colorado. And although all of the senior area personnel originally hail from various coal mining regions, most of them once worked with Hanson, each other, or both at one time or another in their careers.
Emblematic of the group, Tracy Matekovic, Signal Peak’s maintenance manager and a Bowie veteran, has worked with this management team for the last 20 years. “We know each other well. We know what we expect of each other. That helps as it’s my job to ensure that we keep everything going as best as we can,” he said.
“It’s such a team effort that it’s almost sickening to see how well all of these guys get along. I’ve been in other situations where there’s one dominant controlling figure and they make all the decisions. Brad has told me a million times, ‘I’m not a micromanager. You do what you need to do to get the job done.’ That’s what makes us successful here,” said Dale Musgrave, mine manager.
“I’ve worked at other places where you make a mistake and it’s unacceptable. That’s not the case here. If this is the first time you’ve made that mistake, OK, learn from it. You don’t have to worry about being reprimanded or anything else. Just don’t repeat it. Though if you do, you better have a darn good excuse for the second time it happens,” said Steve Campbell, longwall maintenance manager.
As a result of more coordinated efforts, Signal Peak’s incidence rating for safety is currently at 2.88. In August 2010, it was at 10.7. Signal Peak’s crews rebounded and brought incident rates down to 5.09 by the end of December. And in 2011, incident rates were at a 1.68. “We put a lot of safety programs into place, with an emphasis on small crew meetings. Everybody’s main focus is safety which then helps the production come around. Nothing will slow you down more than safety issues,” said Dave Brown, longwall planner. “An accident will stop production or any mine-related work in the area of the incident. If a miner is injured and misses work, that crew will run short handed. To prevent injuries you have to have good training. You have to work as a team and watch each other’s back. You have to pay attention to your work area and job, and you have to slow down to insure that you’re doing that job safely,” said Hanson.
Success and camaraderie at the top has percolated throughout the entire mine. “Frequently people call up here on their days off and ask us, “How are we doing? What pass are we on?” Maybe because of where we’ve come from, our work force is that much more committed,” said Musgrave.
Creating stability, a new leadership team and developing and adhering to strict standards has helped Signal Peak’s workforce mine more than 1 million tons off the longwall eight out of the last nine months. “That takes coordination and teamwork. Seeing all of these guys working together is what’s making the whole turnaround experience worthwhile. We were recruited here to help build a team that could consistently perform to world-class levels. Safety here, however, is paramount. Though production numbers and standards are vital, what I worry about are accidents, citations and S&S violations. I believe that if you take care of those and put high standards in place, the black stuff will come every time,” said Hanson.
Lessons Learned While Moving from Panel One to Two, and Soon to Three
Because Signal Peak is the first 21st century operation in the Bull Mountains, as it blazes a new trail, it’s learning the deposit and adjusting expectations and mining plans as it goes. “It’s not the perfect seam that we once thought we had. It’s proven to be quite difficult. But with what we’re mining today, and how we’re achieving our goals, that makes us even prouder of our accomplishments,” said Hanson.
One of the new team’s first challenges was moving longwall operations from Panel One to Panel Two. Mining conditions changed rapidly and quickly as the cover above the longwall grew from 400 to 800 ft. “Things weren’t perfect in one, but while we were there, we didn’t encounter any abrupt cover changes. It is not that mining under 800 ft down is the problem. It’s what happens when the cover transitions from 800 back to 400 and back again. That transition zone is difficult. We had to learn how to adjust our roof and shield controls to deal with that. The other challenge is the rider seam above the Mammoth. While it was not a problem in Panel One, in Panel Two, with 800 ft of cover and abrupt changes on the surface, the top has failed and we’ve experienced some roof control issues,” said Hanson.
Signal Peak has also dealt with spontaneous combustion in the gob behind the longwall face. “We definitely had a heating event in the gob as we picked up high CO and some traces of fire gases. I believe the heating occurred in an upper thinner seam and we pulled the gasses down into our seam,” said Hanson.
Currently, the mine is using an exhausting system but it is in the process of switching over to a blowing system. “Right now we are addressing permitting issues related to that switch over and are working with MSHA to get the plan approved. This will be a better ventilation scheme to control spon-com. We also purchased a Gas Chromatograph and hired a chemist to monitor gob gasses more closely rather than relying on outside labs to do the job,” he said.
Another important tool needed to control spon-com is a nitrogen generation system. “We’ve purchased the best machine out there and will have it commissioned in late summer. It will replace the system we’re now renting,” said Hanson.
New Roof Control Methods
Roof control and drilling patterns have been changed as well. Currently, roofbolters regularly drill 1-inch holes up to 20 ft above seam height and periodically place video camera scopes into the cavity to more precisely determine what’s above them. “Beginning around cross cut 75 in Panel Two right, we started drilling test holes. Up until that point, we didn’t have much information from test holes. Now we’re actually defining our lithography much more carefully. We’ve found the rider seam is much closer to us in areas where we thought it was further away. We’ve further tightened up our drill holes from Two Right to what we’ve done in Three Right. We’re very confident in the roof conditions,” said Musgrave.
Crews will continue this pattern in Panel Four and beyond. “What we find tells us where we have to start doing additional roof support, put in standing roof to floor supports, or install rib mesh or whatever is necessary. It’s a continual process. We’re even doing this in the mains where crews just finished scoping another hole,” said Musgrave.
Signal Peak crews drill a 12-ft lith graph hole at the beginning of each face being bolted. If the lith graph test hole reveals any significant changes, crews drill an additional 20-ft test hole and use a video camera to scope that hole. After scoping, crews then determine if roof support needs to be changed or added.
Typical gate road roof support consists of 5-ft fully grouted roof bolts placed on 5-ft centers in all entries and cross cuts. The roof itself is fully covered with 18-ft by 68-in. six-gauge wire mesh. All intersections are supported with 7-ft fully-grouted roof bolts.
Typical longwall secondary standing support consists of 30-in. pumpable can crib on 10-ft centers in the No. 1 entry tailgate for the longwall return; 10-in. diameter prop setters on 10-ft centers for the No. 2 entry longwall return; and timbers on 5-ft centers in both the No. 1 and No. 2 entries.
In the event that a lith graph hole shows significant change, or crews enter deep cover, steep slopes or the rider seam is within 10-ft above the Mammoth, “we will install the following roof support on development: 5 ft Install III roof bolts in all entries and cross cuts on 5 foot centers, 7 foot Install III bolts in all intersections on 5 foot centers, trusses on 5 foot centers and full rib mesh on both sides of the entries and cross cuts,” said Hanson.
Implementing a Fixed Maintenance Window
One immediate change Hanson implemented was to slow mine production and incorporate scheduled maintenance windows everyday. “Some mines run until they crash and then they have a maintenance day. Others go five, six days between maintenance shifts. I believe in having a set maintenance period for everybody on the property. That means that each part of the mine has that same quiet downtime to go take care of business,” said Hanson.
Mine crews work 12-hour shifts. But each section is idled for a four-hour down window that has grown to a six-hour window now. Everybody simultaneously takes the down window at the same time. Coordinating between all areas of the mine is vital. “If the longwall idles but the continuous miner units don’t, you lose your window for the mainline belts, the surface, the wash plant. Now, we’re able to better maintain the whole mine. We have more than 30,000 idlers on the mainline conveyor belts. All of the belts are clean and we have 98% belt availability. Now that we’ve grown the downshift window, we’re working to be more productive during the production window,” said Hanson.
Recruitment, Retention & Opportunities for a New Generation of Miners
One of Signal Peak’s consistent challenges has been recruiting and retaining employees. “We’re definitely short-handed. We only have a total of 186 people underground right now and we’re probably short six or more on maintenance. Despite our high production, we’re still leaner than most other mines,” said Hanson.
But as mining conditions and management has stabilized, Signal Peak’s turnover rate has slowed down. “We’re also starting to see more experienced talent looking our way because of our improved safety and production performances. Whereas two years ago, our reputation wasn’t there,” said Musgrave.
Though Signal Peak has been recruiting from around the nation, more and more it is relying on local labor. “We’re working to train local ranch raised kids how to mine coal the right way. What’s great about the size of this reserve and potential of this mine is that there’s a solid future here for any new miner. With luck, an individual could spend their entire career at this mine,” said Hanson. To help grow and stabilize the workforce, Signal Peak has begun partnering with a local community college to plan on how to train that new generation of locally-recruited miners. “Training is vital for us. We are investing in each of our employee’s futures as well as the future of this mine,” said Hanson.
New Longwall Equipment
In June 2011, Signal Peak fired up its new Cat armored face conveyor (AFC). The mine continues to use a Joy shearer and Joy shields. Some of the upgrades to the new system include two 1,650 hp, KP-65 head drive motors and one 1,650 hp P-65 tailgate drive motor, seven tooth head gate and tailgate drive sprockets as well as an upgraded AFC chain. The mine went from a 50 mm broadband chain to a 48 mm powerband. It now has automatic chain tensioners on the tailgate with 1,000 mm of stroke.
“The stageloader has been upgraded with a tensioner with 400 mm of stroke as well as an 800 hp KP 25/30 drive motor with hard blockage protection on the AFC which prevents it from breaking the stage loader chain,” said Steve Campbell, longwall maintenance manager, Signal Peak. The stageloader chain itself has been upgraded from a 42 mm broadband chain to a 42 mm power band Cat chain. The stageloader now runs with an 800 hp, belt driven drive motor. “It uses five triple bonded Kevlar belts that drive the 14 carbide impact elements. The mobile tail has been upgraded and has proven to be easier to maintain and operate as well,” said Campbell.
“I knew we could mine seven digits a month with a little bit of fine tuning. The new longwall has exceeded my expectations. With the upgrades and commitment to make continuous improvements we can continue to increase production,” said Campbell.
Campbell started at Signal Peak in May 2010 as the mine’s longwall maintenance coordinator. He was lured to Signal Peak from Arch Coal’s Skyline mine. Since then he has been promoted to longwall maintenance manager. When Campbell first toured Signal Peak in April 2010, he saw a lot of potential “but there wasn’t a lot of knowledge [about the reserves] and there were problems with the equipment. But they were mostly minor things that could be fixed to make the operation better,” he said. But one reason he took the new position was because of Signal Peak’s ribs. “Compared to a lot of other mines in Utah, Signal Peak’s ribs are straight up and down. All we have to deal with here is mud. No methane, and not a lot of overburden,” he said.
When Campbell came on board, Signal Peak was mining with a complete Joy longwall. “We had the TTT water couplers, a 50 mm Joy broadband chain, and Brolex controls for the drives. We had a Joy crusher and stageloader, and a Matilda tail piece,” he said. Though not as robust as the current longwall, even then Signal Peak still mined a tremendous amount of coal with the 100% Joy setup. “The best we ever did was a very respectable 923,000 tons in a single month. Considering what we had to deal with, we ran a lot of coal with that system,” said Campbell.
Signal Peak has a spare AFC, spare drive, stageloader, crusher, tailpiece and shearer also available. This is needed so it can have the equipment rebuilds done and the face set before the longwall move begins. But as the mine gets ready for the next panel, new equipment is starting to show up.
In many western longwall mines you can economically longwall mine uni-directionally, but in Signal Peak’s low cover, with the sheer size of the equipment, you can’t. In a uni-directional set up, “you want your shearer to go almost as fast as possible. You want to get two passes in about the same time it would take you to get one back and forth pass in a bi-directional situation. The longer it takes to traverse that face and back, the more inefficient uni-di becomes,” said Campbell.
Also, the roof supports have to move faster if you’re cutting uni-directionally. “You have to keep up with the shearer. Uni-directionally, there is excessive wear as you go through more cycles on your equipment to mine less coal. Every shield is moving faster to keep up with that speed. So you put more miles on the rackwheels and skid shoes,” said Campbell. Mining bi-directionally yields a greater sense of efficiency all around.
Signal Peak’s longwall is 100% bidirectional from tail to head. Production crews go all the way to the tailgate and clean up and then the pan pushes on the headgate chute and crews go back and cut 100% of the face. “We’ve got three 65 series gear boxes and 48 mm and 42 mm stage loader chains. All this is supported under 30 and 40-ton shields,” said Campbell.
Including Campbell, Signal Peak has a staff of 14 dedicated to longwall maintenance. “We’re aggressive. We now have the down windows we need to do our maintenance and we have a protocol for all the jobs that we normally do. We can do a headgate and an AFC sprocket in about four-hours start to finish,” said Campbell.
CM Coordination & Longwall Development
Barry Schreckengost, CM coordinator, Signal Peak began his career in Western Pennsylvania but ended up out west in 1997. He too worked many years at Bowie. Primarily in charge of a development crew, “our goals are based on advancement rates, not tonnage. Our development rate is critical,” he said.
Unlike a continuous miner (CM) production crew, Signal Peak’s development section wants “to move horizontally as quickly as we can to mine out our long panels. Though we have two-unit capability, we’re running 1.5 basically. We operate one section 3.5 days per week doing mains development. We have a gateroad section which is mined seven days a week,” Schreckengost said.
Signal Peak’s CM development crews run Joy 12CM12 miners, Joy 10SC shuttle cars, Fletcher CHDDR twin boom bolters, and Joy feeder breakers. To ensure there’s enough room for the huge longwall equipment, Signal Peak mines the belt entry 20 ft wide. Since he’s been there, the CM development crew’s best month was a 374-ft advance per day average. “It peaked for a couple of 12-hour shifts at 500 ft per day. At this rate, we are doing a 220 ft belt, power and fan move every other day, this gives us one day to prepare. The people doing this are the best in the world, with the highest standards and safety. I am very proud to be working with these people,” said Schreckengost.
One of the biggest changes Signal Peak has implemented is instilling standards and explaining why they are in place. “This way everyone from the newest green hat to the experienced hands knows what is expected. This gives everyone a template to follow, you follow the same template each day, and as the moves are repeated the speed and efficiency picks up as well,” said Schreckengost.
Longwall Advance and Maintenance
Dave Brown started at Signal Peak in August 2010 as the mine’s longwall coordinator. After moving up to longwall manager for brief time, he’s now in charge of longwall planning. “We put in a lot of effort to ensure that this longwall can consistently produce high volumes of coal from this reserve. Not long ago, we had a month where we changed out two AFC sprockets, the trapping shoe on both ends of the shearer, the headgate side highspeed bearings, a stage loader sprocket and stage loader chain and we still mined 1.1 million raw tons,” he said.
One important factor with the longwall is staying in seam and producing the cleanest coal possible. Every point you gain in recovery is huge for Signal Peak. “We put a lot of focus toward this and take it very seriously. Our equipment is big and our seam isn’t always consistent with height and grade, so we don’t have a lot of room for mistakes. The seam gets thicker in each panel moving forward but right now we are dealing with tight margins. We do have the newest and greatest technology on our longwall face to help but there is always the possibility of errors being made. We hired a full-time trainer with an outstanding background to help us further on horizon control. His purpose is to train our green operators where needed and to implement automation. So far, so good. The team and horizon control has improved greatly,” said Hanson.
Jared “Bodie” Lester, the new longwall coordinator and newest member of the team, worked for many years at PacifiCorp’s Jim Bridger longwall mine in Wyoming as well as Bowie. “My job is to continue to improve safety while improving production levels from today’s standards. I’ve only been here a short time, but the size of equipment still surprises me. I’m looking forward to working on the next panel lengths—24,000 ft long, 4.4 miles from the mouth of the section to the back of the mine. Panel Four and beyond are going to be challenging and exciting,” he said.
Another part of the challenge at Signal Peak is the higher than normal wear rates on equipment due to the occasional rock. “We see more wear than other mines due to the abrasive shales and clays. Some say it comes from the volcanic ashes from Yellowstone as the coal was being formed. Regardless, it has forced us to be better at taking care of our equipment and being more creative when pumping water out of the mine,” said Hanson.
“The rock is extremely abrasive and it has worn out our pumps and pipe fittings much quicker. We’ve added a ceramic lining to our pipes and fittings to help reduce the wear” said Musgrave.
It’s taken nearly three years to bring Bull Mountain up to speed. The new Signal Peak Energy team has its sights set on becoming a world class operation in not only production, but also safety performance.