Signal Peak Energy will pay a $1 million penalty and serve three years probation for health and safety violations at its coal mine 35 miles north of Billings.
Federal Judge Timothy J. Cavan sentenced the company Monday. The penalty consists of four $250,000 fines for mine violations related to environmental safety and mine worker safety.
“This case holds Signal Peak Mine accountable for its utter disregard for environmental and worker health and safety standards. Mine owners provided little in the way of meaningful oversight of mine operations as long as the mine’s managers could meet reported safety and production goals," U.S. Attorney Leif M. Johnson said in a broad summary of the case. "That lax oversight fostered a climate of fraud, which today cost the mine $1 million in fines. In addition, mine managers lied about the mine’s expenses, its safety record, and other matters, which separately resulted in individual criminal convictions and charges for nine persons, including former mine vice presidents and their associates, on crimes ranging from embezzlement, tax evasion and bank fraud to money laundering, drugs and firearms violations."
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The environmental violations included not getting federal approval before pumping mine waste into abandoned sections of the mine, including chemicals, unprocessed soil containing heavy metals, arsenic and lead, which were over groundwater tolerances. The pumping occurred more than once and lasted for several weeks.
At one point the waste seeped into active mine areas, causing flooding.
The workers safety violations included instructing an employee with crushed fingers not the report the injury as work-related. In that case the worker was en route to the hospital when a mine vice president called and ordered the worker to cover it up. The worker's finger had to be amputated.
In a second incident, a worker with a bad laceration was taken home by the mine safety manager instead of to the hospital. Again, the injury wasn’t reported to the federal Mine Health and Safety Administration. The worker required staples when he went to the hospital the following day. The worker told doctors he had been hit in the head by a falling shelf in his garage. In truth, the worker had been injured by a rock that sloughed off a mine wall.
Signal Peak indicated it was ready to pay the fine and put the incidents spanning five years behind it. The company pleaded guilty to the charges in October. It said a small group of Signal Peak employees had broken the law without the company’s knowledge and that the employees involved no longer worked for the mine.
Cavan said Signal Peak couldn’t blame the actions on a few bad actors given the scope of criminal activity by mine managers. The incidents took place between 2013 and 2018. Mine officials aware of the violations, all of whom are no longer with the company, included President and CEO Brad Hanson, Vice President of Surface Operations Larry Wayne Price Jr., and Vice President of Underground Operations Dale Lee Musgrave.
Two of the men were also implicated in stealing $20 million from the company. Hanson died at his Florida home in 2020 before he could be charged. Price was sentenced to 5 years prison and restitution.
Musgrave pleaded guilty in the accident cover up in December. He hasn’t been sentenced.
Neighbors of the mine reacted to the sentencing as proof that Signal Peak is a bad actor.
"The toxic culture of this mining company is very disturbing to the people of Bull Mountain Land Alliance, people who ranch and live near the Signal Peak mine. They have shown blatant disregard for the law, the environment, and their neighbors,” said Steve Charter, a Bull Mountain Land Alliance founding member.
Charter noted that the mine was under new leadership, which he hoped would improve operations. A member of Northern Plains Resource Council, Charter has long argued that the mine presents a danger to his land values and groundwater.
Signal Peak's ownership traces to Global Mining Holding Co., whose corporate parents are Boich Companies, FirstEnergy Ventures, both of Ohio, plus Pinesdale LLC, a wholly owned subsidiary of Cypress-based Gunvor Group Limited.
