Signal Peak Energy Retools

Overcoming legacy issues, leading U.S. longwall operator sets its sights on the future

By Steve Fiscor, Editor-in-Chief

Signal Peak Energy operates the Bull Mountains mine near Roundup, Montana. The mine runs one of the tallest longwalls in America, cutting coal from the Mammoth seam, which ranges from 9- to 15-ft thick. The company completed a longwall move about two months ago and they have mined a considerable distance into the current panel. They are expecting to move the longwall again in November with all new, or relatively new equipment.

Last year, Signal Peak Energy produced 7.6 million tons, and they were ranked the highest in the U.S. as far as tons per man hour. More importantly, the Bull Mountains mine has a respectable safety record with the Mine Safety and Health Administration reporting a nonfatal days lost incident rate (NFDL IR) of 1.24 for 2023 compared to a national NFDL IR average of 3.21 for similar mines.

“What makes these stats remarkable is that we did it while mining in three different longwall panels,” said Parker Phipps, president and CEO, Signal Peak Energy. “It was a busy year for us. Normally we have a longwall move every 18 months.” They had to move the longwall twice because of a federal court ruling that requires Signal Peak Energy to submit and receive approval for an updated Environmental Impact Study (EIS) before they can access the federal coal within their mine plan.

The restriction on mining federal coal within their mine plan was a setback for a company that was turning the page on legacy management issues. Several years ago, management at the mine was clearly heading in the wrong direction. Phipps and his team have since restaffed the operation and retooled the longwall for optimum production.

Taking Full Advantage of Longwall Equipment

Signal Peak Energy purchased a new set of shields last year from China’s Zhengzhou Coal Mining Machinery Group (ZMJ). “We bought 160 new ZMJ shields last year and 50 more just recently arrived onsite,” Phipps said. “After the next longwall move, the entire 1,400-ft face will be ZMJ.”

The mine decided to only buy 160 shields because they had some Joy shields that were recently rebuilt and they wanted to continue to use them. “After seeing the operational efficiencies from the ZMJ shields, there was no question that we had to complete the purchase and replace the Joy shields,” Phipps said. “The Joy shields served their purpose, but they were designed and specified by miners from the East. We needed side seals, and we have seen an immediate benefit from using them.”

In addition to the height, the Mammoth seam is overlain by a very weak mudstone roof. “Even though the gaps between the shields are 2- to 3-in., it becomes a problem for us because that weak roof crumbles, falls through the gap and accumulates between the shields,” Phipps said. “The side seals have eliminated that as well as the injury potential that results from it.” When a 3-in. rock falls from 14 feet of height and strikes a shoulder or a hand on a rail, it can be debilitating.

The Joy shields were equipped, but not maintained on automation, Phipps explained. “We couldn’t maintain the DA ram sensors on the Joy shields with the amount of rock that was falling between the shields,” he said. “The rear of the shields was constantly gobbed out with rock, so maintaining automation sensors was nearly impossible. The side seals on the ZMJ shields prevented the accumulation of rock and allowed the mine to maintain the sensors and run SRB and automation to help keep our miners from pulling shields in the dust.”

Signal Peak Energy is the first U.S. coal producer to run ZMJ shields in a high-seam, high production application. Each shield weighs 45 tons, which is huge for the U.S. Fully extended, the shields are 16-ft high, which allows the longwall to recover a full 14- to 15-ft coal seam.

“We are using a rear walkway to reduce miner exposure to face conditions,” Phipps said. “The shields are equipped with larger sprags with dual cylinders to provide face support when necessary. The 420-mm legs provide an additional 100 tons of preload and improved tip pressure.

“We’re probably the first big producer to take the Chinese leap,” Phipps said. “And, they have been good to us. There have been hiccups dealing with ZMJ and the communication barriers, but compared to working with Germans, who wouldn’t change anything on a roof support, it’s easy to get accustomed to tailormade shields from ZMJ for a good price.”

Signal Peak purchased an entirely new armored face conveyor (AFC) from HBT America. It is currently being delivered to the mine. “We upgraded from 1,600 hp motors to 1,900 hp motors and kept the
same stageloader-crusher arrangement that we had,” Phipps said. “We were still running the original drives and stageloader from 2009, rebuilding them after each panel over the years. It was time to freshen up. We went with an entirely new system — everything from the tail piece all the way to the tailgate drive is new.”

Phipps said he has seen a huge improvement with customer service with HBT, especially with the speed and the agility with which the company reacts. “The time from placing the order to delivery was essentially six or seven months,” Phipps said. “That wouldn’t have been possible with Cat. The new HBT group is more nimble and they are willing to shift resources to meet delivery times. And they did.” Phipps said he can speak with someone who has the authority to make decisions, like the CEO for HBT America, and work through issues.

The equipment was made in Germany and Poland and shipped to Montana. “We visited the facilities in Europe in May, and the manufacturing process for the panline was well underway,” Phipps said. “They had just started making the drives and now it’s complete.”

Signal Peak operates a Joy 7LS-5 shearer on the longwall and they are happy with its performance.

As far as development is concerned, Phipps said normally it’s not a problem, but it’s very tight right now. “We will have basically zero float coming into this next longwall move,” he said. “As long as we can maintain our historical rates, we’ll be right there. During the last two panels, we had to double-develop a headgate and tailgate for both panels.” Quickly moving from panel to panel created this situation.

Hopscotching Around Federal Coal Reserves

Looking at the Bull Mountains mine map, one would think the mine encountered serious issues with geology. Sadly, it has nothing to do with geology and everything to do with politics.

Ideally, a longwall mine develops a panel of coal that allows the longwall mining system to extract coal at a high rate for an extended period of time, reducing its cost per ton mined. “We have been jumping our longwall around and our mining costs have increased because of it,” Phipps said. “We would normally mine 12 to 14 million tons before we move the longwall and now, we are mining 3 to 4 million tons and moving the longwall.”

When they started the current longwall panel, it had 46 feet of cover. “I believe that’s the lowest amount of overburden for a longwall,” he said. “The court ruling related to the coal on federal lands has forced us to push the limit of our reserves. Normally we would stay at a depth of 150 feet or greater. With approval from the Montana Department of Environmental Quality, we mined those shallow reserves safely and successfully.”

The overburden at the Bull Mountains mine reaches 800 ft at the deepest point of the current mine plan. “We are mining the periphery of our reserves,” Phipps said. “That’s why we’re mining in these low cover areas that we wouldn’t normally have mined or maybe not have mined until the end of the reserve, but the reserves are on private land that we control. Even though the economics weren’t as favorable, we have the approval to do it.”

The question is whether the mine will eventually outrun this situation or will this be a hassle for the life of the mine. “Essentially, we are suing the government on the Builder Act case to get the EIS complete, but we have enough coal to stay running through 2025.”

“We are working closely with the Office of Surface Mining (OSM),” Phipps said. “We are also working closely with the Congress to find a legislative fix. There are currently three bills that have been introduced in the Senate and the House that would reinstate the permit. If any of those bills pass, it fixes our problem. If none of them pass, getting the EIS completed sometime in 2025 gets us back to where we need to be.”

Phipps said he feels confident about the situation. Regime change with the November U.S. Presidential election would likely help the situation, and status quo will not. Other western coal miners operating open-pit mines have found themselves in similar situations. The difference is that they were able to mine the reserves while they conducted the EIS. The Signal Peak EIS was vacated and they cannot mine the reserves while they update the EIS.

Putting the Past Behind Them

Overcoming adversity is nothing new for Signal Peak Energy. Coal Age readers might recall some scandalous behavior involving theft and fraud that took place at the mine between 2013 to 2018. The main culprit, Larry Price, who was vice president of surface activities, admitted to defrauding three companies of more than $20 million. Price embezzled more than $2 million from Signal Peak Energy. He was sentenced to five years in prison and three years of supervised release in October 2020.

At about the same time, Signal Peak Energy and the former senior management team were accused of failing to report workers’ injuries and improperly disposing of mine waste. The U.S. Attorney’s office fined the company $1 million ($250,000 each for four violations). All-in-all, nine people who either worked for or were affiliated with the company were convicted on charges including embezzlement, tax evasion and bank fraud.

Brad Hanson, the previous president and CEO, passed away before any criminal charges were brought against him. Dale Musgrave, vice president of underground operations, received probation. Essentially the top three executives at the company, the CEO, and both vice presidents were involved in either embezzling money or not properly reporting accidents, Phipps explained. “Everyone from that executive group during that period has been terminated,” he said.

Phipps left a successful career at Foresight Energy to join Signal Peak Energy in 2020. In 2022, he was appointed CEO and started the rebuilding process. Jason Taylor, vice president-operations, joined Signal Peak Energy from Foresight Energy when Phipps was promoted to CEO. “Jason has been a great asset to Signal Peak, and is no stranger to running high production longwall mines,” Phipps said.

“It’s unfortunate that those individuals were here, and the company suffered from the poor choices that they made, but that’s all been handled,” Phipps said. “We have put that behind us as a company. We entered into a probation agreement with the federal government and the Environmental Protection Agency (EPA) and by the end of Q1 2025 we will have completed our probation with all agencies.”

With the bad elements purged from the company, Phipps and his team had to completely restaff in a relatively short period of time. “We needed a complete culture change at the mine,” Phipps said. “More than 50% of the salaried staff has turned over all the way from the executive staff down to frontline supervisors. Some were asked to leave, and others left on their own.”

Prior to his days at Foresight Energy, Phipps worked at the Twentymile mine in Colorado. He had established relationships there and some of those people were willing to relocate. More miners with operational and health and safety experience moved to Montana from Illinois and Colorado.

“We also had some very good people here in the lower ranks that were ready to step up and play a bigger role,” Phipps said. “So, the restaffing effort was a combination of bringing in industry veterans and proven guys from the Midwest and the West, plus promoting those that were already here in lower levels that were ready for additional responsibility.”

The new culture that Phipps and his team instilled is thriving today and that is evident with the company’s safety record, and its ability to continue to produce at 7 to 8 million tons per year, despite the permitting challenges that have been thrown their way.

Today, most (98%) of Signal Peak Energy’s coal is exported. Roughly 60% of its production is shipped to Japan. South Korea accounts for 30% and 10% is shipped to Chile. The coal is loaded onto the BNSF Railway and transported to Westshore Terminals in Vancouver, B.C., Canada.

With a new culture established and shallow reserves behind them, Signal Peak Energy has turned its attention to the new equipment arriving on site as it prepares for the next longwall move.