Montana company seeks to avoid closure of Bull Mountain Mine

By Matthew Brown and Matt Volz, Associated Press

Operators of a central Montana coal mine are trying to avoid a potential shutdown after a review board found state regulators improperly approved the mine's expansion.

BILLINGS, Mont. (AP) — Operators of a central Montana coal mine are trying to avoid a potential shutdown after a review board found state regulators improperly approved the mine's expansion without giving enough consideration to its long-term effects on underground aquifers.

Representatives of Signal Peak Energy have been negotiating with the Montana Environmental Information Center advocacy group and the state Department of Environmental Quality on a deal to allow the company's Bull Mountain Mine and its 320 workers to continue operating.

Signal Peak Vice President Joseph Farinelli said a shutdown of the underground mine south of Roundup next summer is unlikely but possible if an agreement is not reached by early January.

Montana's Board of Environmental Review needs to approve any deal. The board next meets Jan. 14.

The board in October rejected a 2013 decision from the DEQ that allowed for the expansion of the Bull Mountain Mine, after MEIC successfully argued that an analysis of its long-term effects to groundwater was flawed.

That analysis concluded no contaminated water would leave the mine area for 50 years after mining is completed. However, state regulations and statutes place no time limit on the threat contaminated water poses to streams or to water used by homes and ranches near the mine.

Under its prior permits, there is enough coal to continue mining at least through next summer, Farinelli said. Yet because of the time needed to get the company's equipment in place, he said workers need to spend months before then digging tunnels, installing conveyor belts and setting up ventilation systems in the 7,100-acre expansion area.

"Should they vacate the permit, it would certainly have the impact of idling, shutting down what we call the development section" of the expansion area, Farinelli said. "That's why we need to ensure ... all this is behind us by May or June."

Existing mining operations could be disrupted, too, state and company officials said. Signal Peak uses longwall mining — cutting across long panels of coal — which requires carefully coordinated development of upcoming panels to keep the equipment moving through the panel being mined.

The mining is now happening on what the company calls panel 5, where work is expected to wrap up in May, Signal Peak attorney Steve Wade told the Board of Environmental Review earlier this month. Development work in the expansion area is scheduled to begin in March.

If the expansion isn't approved and that development work can't begin, about two-thirds of Signal Peak's employees would be laid off, Wade said.

"DEQ was aware of the potential for this action to result in the mine not operating after panel 5 was complete," DEQ public policy director Kristi Ponozzo said Monday. "What we did not recognize until after the October BER meeting was this action could have more immediate complications to mining panel 5."

MEIC attorney Shiloh Hernandez said at the December meeting that the organization is interested in clean water but does not want to put people out of work.

"The Montana Environmental Information Center is trying to be reasonable and find a middle ground," Hernandez told The Associated Press.

Signal Peak submitted proposed revisions to the groundwater analysis to MEIC on Dec. 14, and DEQ is weighing in on the negotiations to ensure the integrity of the process, Ponozzo said.

MEIC Deputy Director Anne Hedges said her organization is working on a response and hopes a deal will be reached by Jan. 7, the deadline to submit a proposal to the board.

"We have to make sure they're not harming water quality," Hedges said.

Signal Peak mined almost 8 million tons of coal from Bull Mountain in 2014 and almost 5 million tons through the first nine months of 2015, according to the U.S. Mine Safety and Health Administration.

Board of Environmental Review attorney Ben Reed said if no deal is reached, the seven-member board has the option to vacate Bull Mountain's expansion permit. Signal Peak then could go to state District Court seeking to block such a move.

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