Signal Peak rode an operational rollercoaster in July and August, when the federal Mine Safety and Health Administration handed down a pair of closure orders and told the company to change its roof control plan.
The initial closure order came July 25 after the mine experienced three falls in fairly rapid succession. No one was injured in the incidents, but longwall production was halted for almost a week. When the company got the green light from MSHA to resume mining, it did so on a limited basis, producing coal for only 10 hours a day. Gradually, full production resumed. But it proved to be short-lived. On August 12, MSHA issued a second closure order following still another fall, this one in a mined-out area that had been abandoned. Again, there were no injuries.
This time, MSHA allowed Signal Peak to get back in partial production in a couple of days. On August 24, the agency gave the nod to resume full production. Mike Dawson, a spokesman for the mine, said officials were cautiously optimistic that the roof fall problem was solved. Miners were continuing to perform roof support ahead of the longwall.
The roof falls continued an uneven year for Signal Peak, which eventually is expected to become a large mine, turning out up to 12.5 million tons annually. The longwall was moved to a new location early in the year, temporarily reducing the mine’s output.
Through the first half of 2011, the mine’s output was less than 2 million tons. It was below 600,000 tons in the second quarter during the longwall move.
The mine, located in Musselshell County, is jointly owned by two Ohio companies—Akron-based FirstEnergy, a utility holding company, and Boich Group, headquartered in Columbus. During its second-quarter earnings call in early August, FirstEnergy reiterated its intent to sell its portion of the mine in the next year. Boich has not indicated if it plans to sell or keep its stake in Signal Peak.
The partners had planned to sell much of Signal Peak’s output to growing Asian markets. FirstEnergy also entered into a 15-year contract to purchase up to 10 million tons of coal annually from the mine.
Signal Peak, formerly known as Bull Mountain, began operating in September 2009 after FirstEnergy and Boich invested more than $400 million to reopen it. The project featured a newly built access to the Burlington Northern Santa Fe railroad that leads to BNSF’s main line in Broadview, Mont.