Land Board quickly approves state coal lease for Signal Peak expansion

2012-09-17T22:00:00Z 2012-09-17T22:40:10Z Land Board quickly approves state coal lease for Signal Peak expansionBy MIKE DENNISON Missoulian State Bureau
September 17, 2012 10:00 pm  • 

HELENA – The state Land Board on Monday unanimously approved leasing state-owned coal to the Signal Peak Energy coal mine south of Roundup, allowing the company to expand and continue coal production for another decade.

Signal Peak, which employs about 250 people, will pay an upfront bonus of $3.6 million for the nearly 12 million tons of coal reserves owned by the state, as well as annual rental fees and a royalty payment on mined coal of 10 percent of its value.

The lease is expected to fetch the state’s school trust fund $15 million during the remaining life of the mine, state officials said.

Signal Peak’s mine produced 5.1 million tons of coal last year and already has produced 4.7 million tons through July this year.

The Land Board, comprised of the state’s top five elected officials, approved the 10-year lease with scant discussion Monday – although it did hear plenty of comments from the public, both pro and con.

Critics of the lease, speaking before the board at a Capitol meeting room, said the state is giving away its resources for a “rock-bottom” price, and relied on a flawed appraisal from the U.S. Bureau of Land Management.

Charyn Ayoub of the Sleeping Giant Citizens Council in Helena said coal is selling for $100 a ton in China and other Pacific Rim countries, and the state is getting 30 cents a ton on the bonus payment.

“Montana needs to get a fair market value for its coal, and relying on BLM’s numbers is not doing to get that,” she said.

Bob Guilfoyle of the United Mine Workers of America also said the mine has a bad safety record, as well as a record of improperly resisting union organization, and that the lease should include language that says it can be canceled if the mine violates federal safety and labor laws.

Board members, led by state Auditor Monica Lindeen, briefly discussed whether to include such language, but declined to do so.

Roundup and Musselshell County officials spoke in support of the mine and its lease, saying the mine has paid millions of dollars in local property taxes and provided many valuable jobs.

John DeMichiei, the chief executive officer for Signal Peak, also appeared at the meeting, and said the underground mine has worked to address safety, health and environmental “challenges.”

“We are actively striving to be a good neighbor,” he said. “Our accident and injury record is half the national average. … This is a company that is committed to doing it right.”

Opponents of coal development also spoke at the meeting, saying the state is contributing to pollution and climate-change problems if it approves the lease.

Nick Engelfried of the Missoula-based Blue Skies campaign came with some pieces of coal he said he gathered at a Missoula railroad crossing, strewn from passing trains hauling coal to the West Coast.

“I’d like to leave this for you, Governor Schweitzer, because I know you’re a big fan of coal,” he said to Gov. Brian Schweitzer, who chairs the Land Board. “I’d be careful with it, though, because it has lots of poisonous arsenic and mercury.”

“I’ll add it to my collection of various coals I have on my desk,” the governor replied.

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(2) Comments

  1. Tronski
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    Tronski - September 18, 2012 12:05 pm Here is the article from Signal Peaks website.
  2. Tronski
    Report Abuse
    Tronski - September 18, 2012 12:05 pm
    I'd echo the sentiment that we are not getting fair market value for OUR resources. Here is an article I found on Signal Peaks own website about how they run one of the "HIGHEST PRODUCING, LOWEST COST MINES IN THE COUNTRY". Hey business is good, but lets not fool ourselves, this is a public resource owned by the people, and we need to get our fair share, just as if this coal was privately owned, that private owner would have their best interest in mind and want to insure they were getting the best price for their resource, and we should be no different. This is not government over-regulating or over-taxing business, this is government giving away it's assets, which are really OUR assets.
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