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Company eyes coal on Montana's Crow reservation

Published on NewsOK Modified: March 17, 2013 at 8:36 pm •  Published: March 17, 2013

To offset those declines, companies including Signal Peak and Cloud Peak have stepped up sales in Asia, where demand remains strong among developing countries and industrialized nations including Japan and South Korea.

Exports last year hit record high levels.

The industry's aspirations for further growth have been challenged by environmentalists and some public officials lined up against several proposed new coal ports on the West Coast. In Montana, the industry's detractors have raised concerns that increased mining could hurt agricultural water supplies and cause congestion on rail lines used to ship the coal out of state.

Supporters say increased coal exports would spur new jobs in mining, shipping and construction.

Federal officials have given initial approval for Signal Peak's work at Hope Ranch, although the decision remains subject to appeal through March 22, said Phil Perlewitz with the U.S. Bureau of Land Management.

The agency has authority over the project as part of the government's Indian trust responsibilities because the site is within the reservation's boundaries, said Perlewitz.

Even though the work is being done on private land, it's expected that the company would need cooperation from the tribe to pursue a mine.

Another major player in the industry, Arch Coal, Inc., has leased a large reserve of state-owned coal just east of the Northern Cheyenne Reservation. That mine, which would require a new railroad, is encountering opposition from some members of the Northern Cheyenne who fear that it will disrupt their traditional culture and increase air pollution.

Combined, the Arch and Cloud Peak proposals entail mining of 30 million tons of coal annually. If Signal Peak also pursues a mine, the three projects have the potential to roughly double Montana's annual production levels.

It's unclear how the company would get the coal off the reservation. There's little infrastructure in the area, and the exploratory work is planned about 10 miles east of the nearest rail line, owned by BNSF Railway.

DiMichiei said it was too early to discuss transportation options. At Bull Mountain, the company built a 36-mile rail spur for $105 million to connect to nearest BNSF line.