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Dugout Canyon Mine

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This page was last updated on January 31, 2019.

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(This is a work in progress; research continues.)

Overview

The Dugout Canyon mine shipped coal by truck to the Acco/C. V. Spur/Savage Coal Terminal, south of Price, where the coal was loaded into rail cars for movement to the Intermountain Power Project near Lynndyl, Utah.

The coal mining permit for the Dugout Canyon mine was issued to Sunedco Coal Company in April 1984, but no development took place until the mine was purchased by Coastal States Coal Company in 1993. In December 1996, Coastal States was reorganized as a 65 percent owner of Canyon Fuel Company, which received a new permit for the Dugout Canyon mine in February 1998. Production started in time to supply coal to IPP, beginning on January 1, 1999. As of early 2016, the Dugout Canyon mine continues to supply coal to IPP.

"Coal mining has occurred within Dugout Canyon since 1925. The Red Glow Mine on the east side of Dugout Canyon was hand-developed by D. J. Collins in 1925. The Rock Canyon seam on the west side of Dugout Canyon was first mined in 1952 by E.S.O. Coal Company. The Knight-Ideal Coal Company mined the Rock Canyon and Gilson coal seams between 1958 and 1964. They extracted approximately 1,326,000 tons of coal by room and pillar and partial pillar extraction in that period. No coal has been mined since 1964, although the portals have been opened and explored several times since then." (Mine Reclamation Plan, Chapter 5, Engineering; Sage Point-Dugout Canyon Mine; Utah Division of Oil Gas and Mining, Permit C0070009)

The Dugout Canyon mine was formerly operated between 1958 and November 1965 by the Knight-Ideal Coal Co., as their Knight-Ideal No. 2 mine. Extraction from two coal seams totaled approximately 1,320,000 tons. (Documents on file at Utah Division of Oil Gas and Mining, Permit C0070009)

The Knight-Ideal mine was in the Rock canyon seam on the east side of Dugout canyon, and in later years also in the Gilson seam on the east side. The much smaller Heiner mine in the Rock Canyon seam was on the west side. Maps of the underground worked areas show that the Knight-Ideal workings in the Gilson seam on both east side and west side (1958-1965) were much more extensive than the Heiner workings on just the west side (1952-1968).

(Read more about the Knight-Ideal Coal Company)

Situated next to the Knight-Ideal mine in Dugout canyon was the Heiner Coal company's mine. In April 1965, controlling interest in Heiner Coal Company was sold to Island Creek Coal Company, and in January 1968, Island Creek Coal company closed the Heiner Coal company's mines. Later in 1968, Island Creek Coal company was sold to Occidental Petroleum Corporation.

(Read more about the Island Creek Coal Company.)

Timeline:

August 1979
The proposed mine site was the subject of a field inspection by personnel of the Utah Division of Oil Gas and Mining. The proposed mine was to be developed by Sage Point-Dugout Coal Company, and its affiliated company, Eureka Energy, which itself was subsidiary of Pacific Gas & Electric. After completing exploratory drilling, and several wildlife studies, on December 8, 1980, Eureka Energy applied for a permit to construct and operate underground mining facilities at the Sage Point-Dugout Canyon Project. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

(As a point of reference, Sage Point is the 8,478-foot peak on the ridge between the two canyons, 1.25 miles east-southeast of the Soldier Canyon mine, and 2.5 miles west-northwest of the Dugout Canyon mine.)

(PG&E created a subsidiary, Eureka Energy, to manage and operate its coal reserves. In February 1982 Eureka Energy, after the collapse of its planned Montezuma Slough coal-fired power plant, sold its interest in the Sage Point-Dugout Canyon Project to Sunedco Coal Company, a unit of Sun Oil Company.)

Pacific Gas and Electric

December 12, 1980
Eureka Energy, as a subsidiary of Pacific Gas and Electric, applied for a mining permit for a coal mine in Dugout canyon. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

December 1981
The following comes from the December 1981 issue of Coal Age magazine, page 13:

Pacific Gas & Electric is offering for sale 250 million tons of Utah coal reserves that were purchased in 1976 and 1979 to supply the proposed Montezuma Power Project near San Francisco. The utility said it has dropped plans to build any coal-fired generating stations in the near future and doesn't need the Utah deposits purchased for $18.7 million.

The coal property, made up of federal, state and private leases, is in the Book Cliffs region of Carbon County, east of Price, Utah. The first tract containing 150 million tons of coal was purchased in 1976 for $10.7 million from Heiner Coal Co., a subsidiary of Island Creek Coal Co. of Lexington, Ky. The second tract with 80 million tons of reserves was bought for $8 million in 1979 from Kennecott Coal Co., a division of Kennecott Corp.

Sun Oil, 1982

February 10, 1982
Eureka Energy sold its interest in the Sage Point-Dugout Canyon Project to Sunedco Coal Company, a unit of Sun Oil Company. Pending the completion of the governmental permitting processes (85 percent federal and 15 percent state), construction of access roads into Fish Creek Canyon and Dugout Creek Canyon was to begin on or about June 1, 1982. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

(Sunedco = Sunoco Energy Development Corporation)

September 19, 1983
Sunedco applied for its own permit as an addendum to the original Eureka Energy application. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

April 30, 1984
After several months of exploration drilling, as well as government permitting correspondence, U. S. Office of Surface Mining issued a 5-year permit Sunedco Coal Company for the development and operation of the Sage Point-Dugout Canyon mine. On June 5, 1984, the Utah Division of Oil Gas and Mining issued its permit for the state lands portion of the coal lease. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

Site inspections in March and April 1985 found that the Price office of Sunedco had been closed, with no apparent activity at the mine site itself. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

In 1985, Sun Oil bought an additional lease to coal reserves in Soldier Creek canyon, which lay to the west of Dugout canyon.

(Read more about the Soldier Creek Canyon coal mine.)

September 1986
Sunedco informed state regulators that there would be no activity for several years. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

December 9, 1986
Sunedco Coal Company informed Utah Division of Oil Gas and Mining that its planned development of the Dugout Canyon mine would begin in about April 1984, and would be in operation by April 1989. The facilities included a coal preparation plant and a railroad spur. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

February 1987
Sunedco requested that, due to economic conditions, their permit be revoked and their bond of $611,875 be returned, which was accomplished on May 19, 1987. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

(At this time, coal permit C0070009 was canceled and the reclamation bond was refunded.)

Coastal States and Sage Point Coal, 1993

(Coastal States Energy company was created in 1973 by Coastal States Gas as a coal mining subsidiary upon the purchase of the Sufco mine near Salina.)

July 3, 1993
Coastal States Energy Company, a subsidiary of Coastal Corporation, purchased Sage Point Coal Company, and its subsidiary Soldier Creek Coal Company, from Elk River Resources, Inc. (subsidiary of Sun Oil company). Utah Division of Oil Gas and Mining was informed by a letter dated August 9, 1993 that Soldier Creek Coal Company was 100 percent owned by Sage Point Coal Company, which in turn was 100 percent owned by Elk River Resources, Inc. The purpose of the letter was to inform the division that on July 3, 1993, Coastal States had purchased Sage Point Coal Co. from Elk River, and that Coastal States was now the overall parent company. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine)

(Elk River Resources had been a subsidiary of Sun Oil Company since August 31, 1979. -- New York Times, September 1, 1979, "yesterday")

Sage Point Coal Company had been incorporated in Delaware on November 12, 1985, and was incorporated in Utah on January 8, 1986. Its office was in Roanoke, Virginia. The corporation was dissolved on February 8, 1998. (Utah Secretary of State incorporation records)

In 1995, Sage Point Coal Company, a subsidiary of Coastal States Energy Company, was the successful bidder for the coal lease on the Alkali Creek tract adjacent to their Soldier Canyon mine. The tract held 2,177 acres and 12 million tons of recoverable coal. Sage Point paid $2,667,000 for the tract lease. (Utah Mineral Activity Summary for 1995, page 10)

March 15, 1996
Coastal States Energy applied for a new permit for the Dugout Canyon mine, with an application that included most of the documents from the earlier Eureka Energy/Sunedco application. Soldier Creek Coal Co. was shown as the operating company; Sage Point Coal Company is not shown. Permit review continued through February 1998, when Canyon Fuel expressed concern at the time the process was taking. Canyon Fuel stated that an opening date after March 1998 would cause serious economic problems. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine) (note different permit number)

Canyon Fuel and Arco Coal, 1996

December 20, 1996
Canyon Fuel Company, a new company owned jointly by Arco Coal (65%) and Itochu of Japan (35%), was the result of the merger of Coastal States Energy Company with four coal mining companies in Utah, including Soldier Creek Coal Company; Sage Point Coal Company; Southern Utah Fuel Company; Skyline Coal Company; along with Coastal Development Company, and Utah Fuel Company. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine)

"Effective December 20, 1996, Canyon Fuel Company, LLC was formed as a joint venture between ARCO Uinta Coal Company (65% ownership) and ITOCHU Coal International Inc. (35% ownership) for the purpose of acquiring certain Utah coal operations and an approximate 9% interest in Los Angeles Export Terminal, Inc. from Coastal Coal, Inc. and The Coastal Corporation." (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

March 1, 1997
The federal coal lease for the Dugout Canyon mine held by Coastal States Energy Company, was transferred to Canyon Fuel Company. (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

March 16, 1998
Canyon Fuel company received an approval for its mining permit, with numerous stipulations of events that needed to happen before mining could begin. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine)

Canyon Fuel and Arch Coal, 1998

April 23, 1998
Utah state regulators were informed of the intended change of ownership of 65 percent interest in the Dugout Canyon mine, from Arco Coal, as a subsidiary of Atlantic Richfield, to Arch Coal, as a subsidiary of Arch Minerals. Canyon Fuel company would remain as the active mining company. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine)

June 1, 1998
Effective June 1, 1998, Arco Coal company sold its 65 percent interest in Canyon Fuel to Arch Western Resources, LLC." (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

By October 1998, Canyon Fuel had started site improvements in preparation for production. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine)

January 1, 1999
Arch Coal signed a contract with Intermountain Power Agency to supply 2.2 million tons of coal per year, through 2010, with an option to supply the same amount through 2015. (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

March 2000
Canyon Fuel Company reduced production at its Dugout Canyon mine. All coal produced was trucked to the Savage Coal Terminal near Price, Utah. Production at the Soldier Canyon mine had ceased in March 1999, and that mine was sealed in July 1999. The Banning loadout was indefinitely idled due to all coal being trucked to the other site. (Utah Division of Oil Gas and Mining, Permit C0070034, Banning Loadout)

July 15, 2004
"Arch Coal, Inc. announced today that it has signed a definitive agreement to acquire Itochu Corporation's 35% interest in Canyon Fuel Company, LLC for a contract price of $112 million. With the completion of this transaction, Canyon Fuel will become a wholly owned subsidiary of Arch Coal." "Canyon Fuel owns and operates two longwall mines in Utah - Sufco in Sevier County and Dugout Canyon in Carbon County. In addition, the company owns the currently idle Skyline mine, which also is located in Carbon County. In total, Canyon Fuel controls approximately 161 million tons of high-quality, low-sulfur coal reserves in Utah. In 2003, Canyon Fuel produced approximately 13.0 million tons of coal." The sale was completed on July 29, 2004. (Arch Coal, Inc., press release dated July 15, 2004, "today")

Bowie Resource Partners, 2013

August 16, 2013
Bowie Resource Holdings completed its purchase of 100 percent interest of Canyon Fuel Company, a subsidiary of Arch Coal Company. The purchase included the Soldier Canyon mine, along with the Dugout Canyon mine, the Banning loadout, the Sufco mine, and the Gordon Creek mines (previously owned by Mountain Coal Company). The purchase agreement was first signed on June 27, 2013.

August 19, 2013
"Arch Coal, Inc. today announced that it has completed the sale of its subsidiary, Canyon Fuel Company, LLC to Bowie Resources, LLC for $423 million in cash. The sale includes the Sufco and Skyline longwall mines, the Dugout Canyon continuous miner operation and approximately 105 million tons of bituminous coal reserves, all located in Utah." (Arch Coal, Inc., press release dated August 19, 2013, "today")

Wolverine Fuels, 2018

October 2018
The following comes from the November 8, 2018 issue of the Sanpete Messenger newspaper:

Bowie appointed a new chief executive officer, and last month it announced it would change its name to Wolverine Fuels, LLC and move its headquarters from Grand Junction, Colo. to to Sandy.

Newly appointed Wolverine Fuels CEO James Grech said, "This move will allow the executive team to be closer to our mines, our workforce and our customers."

In regards to the name and location, Grech said, "In conjunction with the recent management changes and recapitalization of the company, we wanted to offer our employees a fresh start and new identity with the name change. Our workforce is tough and resilient, very much like a wolverine, so we think our new namesake will resonate very well with our employees and the communities in which we operate."

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