Friday, September 04, 2009

Dignitaries get close up look at new Montana rail line, mine

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After an investment of $408 million and a year of rapid construction, the first coal train will leave the Signal Peak Energy Mine near Roundup, Mont., next week, carrying the first load of low-sulfur Montana coal east to an Ohio utility, the Billings Gazette reports. A new railroad junction near Broadview and the mine site south of Roundup were officially dedicated Sept. 2 by top executives from BNSF; FirstEnergy, an Ohio utility; the Boich Group of Ohio; Signal Peak Energy; and a corral of Montana politicians, including Gov. Brian Schweitzer.

In the early 1990s, efforts began anew to reopen the mine, then owned by the Bull Mountain Coal Co. But the attempts were unsuccessful and a string of lawsuits followed.

BNSF Chairman and Chief Executive Matt Rose, who traveled to Montana for Wednesday's ribbon-cutting ceremonies, said that after many years of talk, "nothing ever happened."

But in the spring of 2008, when the Boich Group of Ohio and an Ohio utility, FirstEnergy, teamed up to buy the mine, Rose said he became convinced they were going to be successful. And other key players are taking a fresh look at this Montana mine as well, he said.

"It really does make people start to reconsider how the quality coal can be used in their portfolio," Rose said. "Coal will remain a very large piece of our energy future."

Coal currently produces 52 percent of the electricity consumed in the U.S.

The rail spur ties into the BNSF main line three miles south of Broadview at a crossing that was named "Walter" on Wednesday in honor of the world's oldest man, 112-year-old Walter Breuning of Great Falls. For half a century, the Montanan worked for BNSF's predecessor, the Great Northern Railway.

The Boich Group and FirstEnergy are 50/50 owners in the Signal Peak project. The 36-mile rail spur cost $105 million.

In one year, the mine site progressed from a few older buildings and little external infrastructure to a large industrial complex. The mine site has a new office, warehouse and shop; a wash plant capable of cleaning 2,000 tons of coal an hour; two giant storage silos; an extensive conveyor system; and the railroad spur.

"It's not just the rail, there was a whole infrastructure built," said Signal Peak Energy President John DeMichiei.

The mine employs 190 people and, along with the railroad, is expected to pay $28 million per year in federal and state taxes. The first 120- to-140-car train is expected to leave the mine for Ohio on Sept. 9.

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