Kaiser Coal Company
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This page was last updated on January 30, 2019.
Kaiser Leases Sunnyside
In 1943 Henry J. Kaiser leased Sunnyside No. 2 mine from Utah Fuel Company, to furnish coking coal for his new steel mill at Fontana, California. The mine had been closed since 1921 because of a fire. After extinguishing the fire, the mine remained closed due to low market demand for coal. (Arthur E. Gibson, "The Kaiser Mine, Sunnyside", Centennial Echos from Carbon County, 1948, p. 261)
(The underground mining methods of the Kaiser Company's leased operations at the Sunnyside coal mine were the subject of a nine-page article in Coal Age magazine, July 1944. The article included several photos of the underground operations, and several diagrams of the mine workings, along with a flow chart of the new-in-1942 coal preparation plant.)
(The underground mining methods of the Kaiser Company's leased operation, and use of trackless rubber-tired mining methods at the Sunnyside No. 2 coal mine were the subject of a five-page article in Coal Age magazine, December 1948. The article included several photos of the underground operations, and several diagrams of the mine workings.)
Kaiser Buys Utah Fuel
In 1950 Kaiser bought Utah Fuel Company, and operated the properties at Sunnyside, Clear Creek and Castle Gate as the Utah Fuel Division of Kaiser Steel. Kaiser later sold the Castle Gate and Clear Creek operations to Independent Coal & Coke, which later sold both operations to North American Coal Company. North American later sold the Castle Gate property to McCulloch Oil Company, and the Clear Creek property to Valley Camp Coal Company. (Sun Advocate & Helper Journal, Special Edition, January 2, 1975, p. 5)
April 11, 1950
"The Book Cliffs Corporation, a subsidiary of Kaiser Steel Company, was high bidder yesterday (April 11, 1950) at a public auction of 100,000 shares of Utah Fuel Company stock. The bid was $6,800,000. The auction, held in the office of the Guaranty Trust Company here, was a consequence of the reorganization of the Denver and Rio Grande Railroad. The next step will be a hearing before New York Supreme Court Justice Ferdinand Pecora on Thursday (April 13, 1950) for confirmation of the sale." (New York Times, April 12, 1950, "yesterday")
April 15, 1950
New York Supreme Court Justice Ferdinand Pecora approved the sale of Utah Fuel to Kaiser Steel. During the reorganization of the Rio Grande railroad, completed on April 11, 1947, ownership of Utah Fuel Company was held out as a separate action because its stock was designated as collateral on a series of 50-year bonds issued in July 1901, valued at $10 million. The stock was held by the trustee, Morton Trust. The Utah Fuel stock was sold separately to satisfy that mortgage. At the time, Utah Fuel owned six coal mines in Utah and Colorado, and was one of the largest bituminous coal producers west of the Mississippi River. (New York Times, April 14, 1950; April 15, 1950; See also: Salt Lake Tribune June 28, 1901 and July 8, 1901)
"The Henry J. Kaiser interests, represented by the Book Cliffs Coal Corp., a subsidiary of the Kaiser Steel Co., are reported to be the highest bidder for the 100,000 shares of capital stock of the Utah Fuel Co. The sale was ordered as an outgrowth of the 1947 reorganization of the Denver & Rio Grande Western R. R., of which Utah Fuel is a subsidiary. The Kaiser organization's bid of $6,800,000 is subject to confirmation by the court.' (Coal Age magazine, May 1950, page 142)
April 24, 1950
"The Kaiser Steel Co. April 24 formally took over ownership and operation of the Utah Fuel Co., one of the largest producers of bituminous coal west of the Mississippi. The company was acquired by Book Cliffs Coal Corp., a Kaiser subsidiary, bidding and paying $6,800,000 for the entire capitol stock of 100,000 shares." (Coal Age magazine, June 1950, page 146)
Utah Fuel Company was merged with Book Cliffs Coal Corporation, a Kaiser subsidiary, on December 5, 1950. (Carbon County Miscellaneous Records Book 15-D, p. 4)
Book Cliffs Coal Corporation was merged with Kaiser Steel Corporation on February 23, 1951. (Carbon County Miscellaneous Records Book 15-D, p. 59)
(The Book Cliffs Coal Company had been organized in November 1949 to acquire and operate the Blue Diamond coal mine at Horse Canyon. E. S. O'Connor was the new company's president. Production was to be 200 tons per day, and the coal was to be shipped by truck. -- Coal Age magazine, November 1949, page 136)
(The techniques and benefits of roof bolting in the Kaiser Company's Sunnyside No. 2 coal mine were the subject of a four-page article in Coal Age magazine, October 1950. The article included several photos of the results of roof bolting within the underground mine workings.)
February 5, 1951
The deed that passed ownership from Utah Fuel Company to Book Cliffs Coal Company was dated February 5, 1951.
March 5, 1951
Utah Fuel Company, incorporated on April 17, 1901, became the Book Cliffs Coal Corporation on March 5, 1951. (Utah corporation, index number 3111)
March 13, 1951
Utah Fuel Company was formally merged with its parent company, Kaiser Steel Corporation. The Sunnyside mine was operated as a captive mine, meaning that its product was shipped to only one customer, in this case to Kaiser Steel's steel plant at Fontana, California. Utah Fuel company also had five non-captive mines at Castle Gate and Clear Creek in Utah, and at Somerset, Delcarbon and Oliver, Colorado. These five mines were non-captive mines and sold their product on the competitive open market. (Coal Age magazine, April 1951, page 136)
"Sale of its five commercial coal mining properties in Utah and Colorado by the Kaiser Steel Corp. was anticipated last month with the announcement that a 90-day option for their purchase had been secured by James L. White; Salt Lake City attorney, and a group of associates. Kaiser Steel's coking-coal properties at Sunnyside, Utah, are not involved. According to Mr. White, the Clear Creek and Castle Gate, Utah, mines "will be sold to a leading Utah coal company," and from other sources it was indicated that they are being offered to the Independent Coal & Coke Co. Plans for the disposition of the three Colorado mines were not reported. The five mines were acquired by Kaiser Steel in April, 1950, when it purchased the Utah Fuel Co. at auction." (Coal Age magazine, November 1951, page 140)
"Acquisition by Independent Coal & Coke Co. of two commercial mines from the Utah Fuel Div. of the Kaiser Steel Corp. was formally ratified by stockholders last month. The company is leasing the Castle Gate and Clear Creek properties from James L. White, Salt Lake attorney who previously had obtained options on five Kaiser commercial mines. Independent Coal & Coke reportedly has agreed to exercise an option for their purchase before the end of the lease. No immediate change in personnel is expected, the new operators said. Disposition of the three Kaiser mines in Colorado has not been reported." (Coal Age magazine, December 1951, page 150)
Kaiser opened its Sunnyside No. 3 mine, with a reported capacity of 1,500 tons per day, bringing the Sunnyside annual production up to 1.5 million tons per year. (Coal Age magazine, February 1953, page 142)
To support its planned installation of a third blast furnace, and 90 additional by-product coke ovens at its Fontana steel plant, Kaiser increased the annual production of coking coal from the Sunnyside mines, from 1 million tons per year, to 1.7 million tons per year. The increased production came partly from reopening part of the original workings of the original Utah Fuel mine, and calling it the new No. 3 mine. The following comes from the May 1953 issue of Coal Age magazine:
The Sunnyside property extends 6-1/2 miles along the Book Cliffs escarpment and, under present plans, is divided into three mines—Nos. 1, 2 and 3. No. 1 at the north end and No. 2 at the south are working. No. 3, in the center, is being re-opened. Each mine has approximately 2 miles of outcrop and is developed by a set of slope entries near the center. Track haulage is used from the shuttle-car loader heads to the preparation plant, located near the outcrop near No. 3 portal. The coal is hoisted up the main slopes and, in the case of Nos. 1 and 2 mines, is moved by mainline locomotives from the heads of the slopes about 2 miles to the surface.
The Sunnyside property was opened in 1896 by the Utah Fuel Co. The coal was coked at Sunnyside in beehive ovens and the operation served primarily the smelter industry. Sunnyside prospered and expanded until there was a total of 810 ovens in operation by 1918. A decline started in 1924 and Sunnyside nearly became a ghost town in the 1930s.
In 1942, Kaiser, in need of coking coal for the new steel plant at Fontana, entered into an agreement with the Utah Fuel Co. to lease No. 2 mine, which had been shut down 18 years. Kaiser operated No. 2 as lessee from November 1942, to May 1950. In May 1950, Kaiser acquired all the Utah Fuel interests at Sunnyside, including No. 1 mine, the 297 beehive ovens still operating, a town of 450 houses and stores, a water system, and extensive coal reserves.
Throughout the first 50 years, the operation and maintenance of the Sunnyside property had been subject to the economic fluctuations resulting from two world wars and the big depression of the 30s. Most of the mine and plant was aged and in a poor state of repair. Some areas of the property had been completely worked out—others partially. And in some parts only development entries had been driven and then abandoned. The upper seam had been mined in approximately one-third of the country opened up. The remainder of the work had been done in the lower seam. There were many miles of caved aircourses and haulage entries in the old workings and in the active No. 1 mine. Having acquired the property, it became Kaiser's job to make the most of it.
(The underground mining methods of the Kaiser Company's operation at the Sunnyside coal mine were the subject of a eight-page article in Coal Age magazine, May 1953. The article included a large photo of the surface plant, several photos of the underground operations, and a diagram of the mine workings.)
(The underground mining methods of the Kaiser Company's operation at the Sunnyside coal mine were the subject of a four-page article in Mining Congress Journal magazine, March 1957. The article included photos of the underground operations.)
To provide better roof control and to stabilize obsolete entries and worked out pillar areas against bounces, and to seal and fill isolated or possible fire areas, in December 1957 Kaiser began installing yieldable steel arches in motor roads, hoist ways, man ways, and air cources The arches were backfilled with washery refuse (sand) that was hydraulically transported and placed. Originally, "coke breeze" was used for backfill material, until equipment to handle and reduce the washery refuse could be installed. By August 1961 over 18 miles of tunnels had been completed and over 350,000 tons of fill material had been placed. Where backfilling had been completed there had been no bounces. These same areas formerly had been subject to numerous and violent bounces. (Coal Age magazine, August 1961, page 93)
Kaiser Sells Utah Fuel
In October 1960, Kaiser sold Utah Fuel company, and its mines at Castle Gate and Clear Creek, which were non-coking coal mines. Kaiser separated the Sunnyside mine with its high-quality coking coal, from the Utah Fuel assets, and retained them as a captive mine to its Fontana steel plant.
At the same time, to better focus on its coking coal reserves at Sunnyside, Kaiser spun off its non-coking coal interests in Colorado, and its coal leases in other parts of Utah. Although Kaiser had merged with its Book Cliffs Coal subsidiary in 1950, the company was resurrected to hold the non-coking coal assets of the company.
October 17, 1960
Book Cliffs Coal Company was sold to Minerals Development Corporation. Included in the sale was mine equipment, coal contracts, and 320 acres of coal lands in Emery County, along with half interest in 2,400 acres of non-coking coal lands in the so-called "East Carbon District", near Dragerton. (Later known as the Lila Canyon mine.) At the same time, Minerals Development also announced the purchase of the other half interest in those same 2,400 acres, from Malcolm N. McKinnon. The sale and liquidation of the Book Cliffs property followed the death in May 1960 of E. S. O' Conner, former president and general manager of Book Cliffs, and of Independent Coal & Coke. The Book Cliffs mine in Emery county produced about 75,000 tons per year. (Salt Lake Tribune, October 18, 1960)
(Malcolm N. McKinnon [Jan 1910-Sep 1975] was mentioned in several news items in the 1945-1960 time period about being an independent, anti-union coal mine owner and operator. He operated a mine in Huntington Canyon, across the ridge south from the Clear Creek mine.)
The sale of Book Cliffs Coal Company to Minerals Development was announced by R. G. Heers, Fontana, California, president of Book Cliffs (also manager of raw materials for Kaiser Steel at Fontana). Minerals Development estimated it had purchased combined coal reserves on the lands at about 25 million tons. It was a non-coking, bituminous deposit. (Coal Age magazine, November 1960, page 50, "News Roundup")
Longwall Mining Starts
Kaiser's coal mine at Sunnyside was one of the first installations of longwall mining in the United States. "Investigation of the possibilities was stimulated by the exhibition of the Dowty self-advancing support system at the 1959 Coal Show of the American Mining Congress. As early as 1944, John Peperakis, manager of the Sunnyside mines, had become interested in longwall as a result of his experience and observations as a commanding officer in charge of one of the coal districts in Germany for the American army. In 1960 a trip abroad was made by R. G. Heers, Kaiser manager of mines and raw materials, to see and evaluate the units already in service. The possibilities appeared impressive and as a result it was decided to try longwall." "In the initial months of operation (the first full one was December, 1961), the usual achievement was 4 cuts per shift, providing about 500 tons of material, including the partings. Rates of 7 tons per minute were marked up on several occasions. The best shift produced 700 tons of material." (Coal Age magazine, May 1962)
The concept of longwall was tried at Sunnyside's No. 3 mine because the mine was extracting coal from the lower Sunnyside coal seam, and with only about 20 feet between the lower seam, and the upper seam (as part of the previously worked-out old workings, using rooms and pillars), the roof of the lower seam was found to be unstable, with unsafe caves and bounces being regular occurances. "This trial installation, started up Nov. 13, 1961, was made in an endeavor to offset rising mining costs resulting from poor top, bouncing and complications due to multiple-seam mining. Better overall recovery, a reduction in rock mined and improved safety were also items with this system of mining that were expected to improve efficiency at No. 3 mine. As of June 7, 1962, some 75,000 tons had been mined under very adverse conditions with an overall productivity, on a raw-coal basis, of 40 to 50 tons per minute, with an 11-man crew. At the end of this period, the productivity was nearer 50 than 40 tons per minute. Recovery was nearly 100%, compared to around 50% with conventional methods, and significant savings were being achieved in cost of materials and supplies. John Peperakis, Kaiser Steel Corp., Mine Manager, Sunnyside, Utah, emphasized that safety was a major consideration in trying the longwall unit. After it was in for a time, it became apparent that there were additional benefits in savings in materials and in the tremendous production potential." (Coal Age magazine, August 1962)
(A "cave" in a coal mine is the collapse of the roof. A "bounce" is the eruption of the floor. Both Sunnyside and the Geneva mine in Horse canyon were subject to caves and bounces due to the surrounding sandstone layers, and the deep overburden above the coal seams.)
(The methods of longwall mining at Kaiser's Sunnyside mine were the subject of a five-page article in Coal Age magazine, May 1962. The article included several photos of the longwall operations.)
June 17, 1969
A new high capacity loading facility at Sunnyside was dedicated by the presidents of Kaiser Steel Corporation, Denver & Rio Grande Western Railroad, Union Pacific Railroad, and AT&SF Railway, along with Utah Governor Calvin L. Rampton. The new facility, said to have cost Kaiser Steel $1.2 million, was used to load a 8,400 ton Coal Liner unit train every four days. The service began late in 1968 using leased cars. The dedication was held in June 1969 with the delivery of the new gondola Coal Liner cars. (Deseret News, June 13, 1969)
The following comes from the August 1969 issue of Coal Age magazine, page 74:
Unit Train Facility, Walter Mueller, Jr., safety engineer, Kaiser Steel Corp., Sunnyside, Utah —The rapid coal handling unit train facility at Sunnyside, Utah, has been in operation since October, 1968, loading coal at rates up to 11,000 tons per hour. The system was designed and constructed to lower the freight rate on coal shipped to Kaiser's Fontana steel plant. To date over 90 unit trains have been loaded, handling the Sunnyside mines production of 5,500 tons per day. Designed and built to Kaiser's specifications by the H & J Supply Co., Price, Utah, the entire structure incorporates over 400 tons of steel. Major components of the facility are the tunnel and tracks; the steel cones and loading gates; the earth storage pad; and the tower and conveyorway.
The tunnel consists of railroad tracks on a 1-1/2 % grade, over which are placed steel arches, 25 ft high and 20 ft wide, upon a single continuous concrete footer. The tunnel is 456 ft long, with a control room above the tracks attached to the outside of the steel arches.
Located 25 ft from each side of the tunnel center are two inverted steel cones that are positioned directly over the center of the tracks. The top of each of these cones are level with the earth pad which is 10 ft above the arches. Upon the pad and cones rests the coal stockpile, and through these cones pass the coal, being regulated in the tunnel by two pneumatic ram-operated loading gates. These gates are patterned after similar successful gates located at shaft loading stations inside our mines. The gate construction is merely a 4 x 6-ft door that is attached to mine car wheels rolling on 60-lb track and welded to the double air rams.
Prior to loading, the train backs the empties through the tunnel, until the first empty car behind the locomotive is positioned under the north gate. This gate then loads two-thirds of the car, with the train then moving forward at a constant rate of 0.9 mph. The second gate then loads the remaining one-third of the car, and this procedure continues until the train is fully loaded.
(The details and operation of the unit train loading facility at Kaiser Coal company's Sunnyside mines were the subject of a seven-page article in Coal Age magazine, September 1969. The article included several photos of the loading facility, with drawings of the facility itself.)
Kaiser Steel Company had shipped metallurgical coal for Japan's steel industry from its Sunnyside mine from April 1971 until March 1972. (Salt Lake Tribune, July 8, 1980)
The last coal was shipped from the Sunnyside (Utah) and Redstone (Colorado) mines when the Kaiser closed its Fontana coke plant in late 1982.
In September 1982, there was a note in the New York Times stating that Kaiser would close its coke plant "by the end of 1982." The news item went on to say that Kaiser would continue making steel at Fontana until the facility was closed "by the end of next year," by using its stockpile of coke. (New York Times, September 18, 1982)
Kaiser Steel Corporation closed its Fontana Works. In August 1984, two investor groups bought Kaiser Steel for $374.4 million. Later, the investors sold the most modern section of the plant for more than $110 million to California Steel Industries, a partnership of local, Brazilian and Japanese interests. (Los Angeles Times, August 4, 1985; FundingUniverse.com)
After closing the Fontana steel plant, and selling off its other steel-related assets, Kaiser Steel focused on developing its coal resources. In Utah, Kaiser Steel had purchased the Sunnyside mine in 1950 when Kaiser purchased Utah Fuel Company, with properties at Sunnyside, Clear Creek and Castle Gate, operating the company as the Utah Fuel Division of Kaiser Steel. The Clear Creek and Castle Gate properties were sold in 1968 to Independent Coal and Coke. The closure of the Fontana steel plant meant that Kaiser Coal no longer had a market for its coal.
February 29, 1984
"Kaiser Steel Corporation underwent an acquisition merger by J. A. Frates, a Tulsa, Oklahoma investor group. As a result of this merger, new officers and a new board of directors have assumed management of Kaiser Steel Corporation. The name of the company, mailing address and other current corporate information on file with your agency remains unchanged." The permit for the Sunnyside coal mine was changed to Perma Resources of Colorado Springs, Colorado. (Documents on file with the Utah Division of Oil, Gas and Mining)
In February, 1984, an investment group led by J. A. Frates of Tulsa, Okla., and Monte Rial's Perma Group bought Kaiser Steel in a leveraged buy-out valued at $374 million. (Los Angeles Times, May 8, 1985)
November 11, 1984
Kaiser Steel Corporation purchased the nearby Horse Canyon mine from U.S. Steel, and indicated that it would maintain the operations in a temporary suspension status pending further corporate decisions as to the future use of the facilities. Following Kaiser Coal's bankruptcy in February 1987, on April 5, 1990 Kaiser Coal sold the Horse Canyon mine to Intermountain Power Agency (IPA). During 1990 and 1991, IPA reclaimed the majority of the surface disturbance leaving only a main facilities pad with buildings essential for future mine operations. In September 2000, UtahAmerican Energy, Inc. acquired the Horse Canyon Mine from IPA. (Documents on file at Utah Division of Oil, Gas and Mining)
"Kaiser Steel Corp. has bought two idle underground coal mines in Carbon County, Utah, from U.S. Steel Corp. for an undisclosed sum. A Kaiser spokesman said the company acquired the Columbia and Geneva mines to provide access from its Sunnyside mine to a 100 million-ton Kaiser lease south of the former U.S. Steel properties. A Kaiser spokesman said develop-met plans will depend on the marketplace." (Coal Age magazine, February 1985, page 39)
Kaiser Steel Corporation passed ownership of the Sunnyside coal mine to a new wholly-owned subsidiary, Kaiser Coal Corporation. (Kaiser Steel Corporation, SEC 10-K Annual Report for the year ending December 31, 1985)
In April 1985, the Company transferred all of its Utah and New Mexico coal properties to a new wholly-owned subsidiary, Kaiser Coal Corporation. The facilities and equipment of the operating mines in Utah and New Mexico were in turn transferred to two subsidiaries of Kaiser Coal Corporation, Kaiser Coal Corporation of Sunnyside and Kaiser Coal Corporation of York Canyon, respectively. In 1985, the Company also obtained certain coal properties located in Colorado, as discussed below.
In December 1985, Kaiser Coal Corporation acquired the Somerset coal mine complex near Paonia, Colorado and a coal preparation plant near Wellington, Utah from United States Steel Corporation and U.S. Steel Mining Co., Inc. At the same time, Kaiser Coal Corporation entered into a contract to supply the requirements of high volatile metallurgical coal to United States Steel Corporation's Geneva Steel Mill in Provo, Utah. The Company expects to supply 750,000 to 800,000 tons of coal per year through 1989 under this contract. The Somerset coal mine complex contains 60 million tons of recoverable high Btu, low ash, low sulfur coal. The mine, which was idled prior to the acquisition, also includes a unit train loadout facility and mining equipment, some of which has been relocated to Kaiser Coal Corporation's operating mines in Utah and New Mexico. The coal preparation plant near Wellington, Utah has a capacity of 2 million tons of clean coal per year. The Wellington coal preparation plant is approximately 20 miles from the Company's Sunnyside Coal Mine and is linked by railroad.
The Company and its subsidiaries now control coal acreage in Utah, New Mexico, and Colorado and operate mines that produce both steam and metallurgical coal in Utah and New Mexico. The in place raw coal reserves, based on properties that have been explored, total more than 2.1 billion tons. From these reserves, potential mining areas are estimated to contain 1.3 billion tons of recoverable coal
April 10, 1985
Kaiser Steel was owned jointly by J. A. Frates' Equivest Group, and Monte Rial's Perma Group (also known as Perma Resources). J. A. Frates of Tulsa, Okla., had been chairman of Kaiser Steel, and Monte Rial had managed the company's day-to-day operations. The Perma Group acquired 100% of the company April 10, paying about $40 million to the Frates group. (Los Angeles Times, May 8, 1985)
January 20, 1986
The Utah Division of Oil Gas and Mining, and the federal Office of Surface Mining issued a five-year permit for Kaiser Coal Corporation of Colorado Springs, Colorado, to mine coal until January 1991. The permit showed that Kaiser planned on extracting 2 million tons of coal per year until about 2010, when the mineable coal would be exhausted on the 14,385 acres of permitted area. Kaiser Steel Corporation had submitted its application on March 23, 1981, with the permit being approved almost five years later; the delay coming from multiple federal and state agencies having to approve and comment on the application, in accordance with regulations that took effect with the passage of the Surface Mining Control and Reclamation Act of 1977 (SMCRA). (Documents on file with Utah Division of Oil Gas and Mining, ACT0070007)
Sunnyside No. 1 was to be the site of most mining operations, on approximately 385 acres. The No. 1 mine was to be expanded to what was known as B Canyon (1,190 acres) and C Canyon (2,650 acres). Mine No. 2 was to be closed and reclaimed. Mining operations in Mine No. 3 encompassed 1,450 acres.
Kaiser Coal Corporation was a subsidiary of the larger Kaiser Steel Corporation, having been separated from the interests of Kaiser Steel Corporation in April 1985. In September 1985 when the federal Mine Health and Safety Administration changed its requirements for ventilation of mines using long wall mining methods, Kaiser Coal was mining from Sunnyside No. 1, No. 2, and No. 3.
"Mine workings are approximately 6.5 miles in length and extend a maximum of 2.5 miles down-dip to the east. The first five year permit area encompasses 14,300 acres. Mining, during the first five year permit term, will occur in the Upper Sunnyside coal seam in the No. 3 Mine and Lower Sunnyside coal seam in the No. 1 Mine and No. 2 Mine. Sixty-five to eighty percent of the coal will be produced by longwall mining methods. The remaining production will be from continuous miner entry development and pillaring in areas unsuitable for longwall methods."
"About 55 million tons of coal have been produced in the past, and projected production ranges from .8 to 1.0 million tons of coal per year during this permit period. Coal is washed at a preparation plant, conveyed to stockpiles and transported out by unit trains of the Denver & Rio Grande Western Railroad."
February 12, 1987
Kaiser Steel Corporation filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code, which allows a company to continue operating while it works out a plan to pay its creditors. Kaiser Steel sold much of the company, including its steel business. It was anticipated that the company's coal operations would become the property of the secured creditors following the reorganization. Included in the bankruptcy were Kaiser's coal properties: Kaiser Coal Corp., Kaiser Coal Corp. of New Mexico, Kaiser Coal Corp. of York Canyon, Kaiser Coal Corp. of Utah and Kaiser Coal Corp. of Sunnyside. (Los Angeles Times, February 12, 1987; February 14, 1987; June 14, 1988)
June 6, 1987
Kaiser Steel Corporation hired Morgan Guaranty Trust to advise it on the sale of its coal properties. Kaiser controlled more than 1.3 billion tons of low-sulfur bituminous coal in Utah, New Mexico and Colorado. (New York Times, June 6, 1987)
April 21, 1988
Kaiser Coal Corporation closed its Sunnyside No. 1 and No. 2 mines at Sunnyside, Utah, idling 189 miners and 33 salaried workers. Twelve salaried workers were retained. Kaiser Coal was bankrupt at the time, and asked the bankruptcy court for permission to lease the mines to Sunnyside Reclamation and Salvage to allow that company to mine the remaining one million tons of coal reserves still in the mines. Mellon Bank owned the longwall mining machine in the No. 1 mine, which had been leased to Kaiser Coal, and the bank been trying to repossess the machine since July 1988 and sell it to another coal company. Mellon had been paying the maintenance costs of the mine, about $150,000 per month ($15,000.00 per month seems to be a more accurate figure), which was necessary to keep water pumped out of the mine, which would damage the mining machine. Most of the costs were electricity for the pumps. On November 25, 1988, Mellon "walked away from the situation", after Utah Power & Light agreed to keep the pumps running, at least until a buyer could be found for the mine, on or about December 7, 1988. (Salt Lake Tribune, December 6, 1988)
Sunnyside Reclamation and Salvage of Boulder, Colorado, owner of the Sunnyside mines, finished sealing the No. 2 mine. (Salt Lake Tribune, March 17, 1989, "last October")
February 22, 1989
Geneva Steel signed an agreement to purchase 840,000 tons of coal over the next two years from Sunnyside Reclamation and Salvage of Boulder, Colorado. (Los Angeles Times, February 22, 1989)
The bankrupt Kaiser Coal Corporation sold the Sunnyside mines to Sunnyside Reclamation and Salvage of Boulder, Colorado. (Deseret News, April 24, 1989, "last month")
March 17, 1989
The Sunnyside coal mines were sold to a new company, Sunnyside Mines, Inc., formerly known as Sunnyside Reclamation and Salvage Co. (Salt Lake Tribune, March 17, 1989)
SUNNYSIDE, Carbon County -- The approximately 20 square miles of Sunnyside Coal Co.'s old and current workings here comprise Utah's largest operating underground coal mine. Sunnyside Mines Inc., a Boulder, Colorado-based holding company for Sunnyside Coal and originally known as Sunnyside Reclamation & Savage Co., bought the Sunnyside Mine in a deal approved by the U.S. Bankruptcy Court of Colorado in early 1989. The acquisition involved the No. 1., No. 2 and No. 3 Sunnyside mines, a tipple above ground where coal is washed, crushed and loaded on railroad cars and the nearby North Lease with about 30 million tons of coal reserves. Sunnyside Coal finished sealing off the No. 2 mine, which contained the first coal mined on the property, last October, said mine manager Joe Fielder.
The Sunnyside mine previously was owned and operated by Kaiser Coal Co., a subsidiary of Fontana, California-based Kaiser Steel Corp., both of which filed for bankruptcy. Among the specific mining challenges Mr. Fielder said he faces because of the shear size of the workings are the large amounts of overburden, the long distance from the portal to the work area and the old workings through which miners must pass to reach their work sites.
Those workings date to 1899 when the Denver & Rio Grande Western Railroad's coal subsidiary, the Utah Fuel Co., began developing them in search of more suitable coal for coking than it was producing at Castle Gate, another Carbon County mine some 40 miles to the northwest.
Mr. Fielder said the distance between the only place Sunnyside Coal is currently mining - a longwall section in the No. 1 mine - and the top of the highest nearby mountain is about 3,000 feet. He said it's a five-mile walk from the portal to the work area.
Mr. Fielder said it is widely recognized in the mining industry that the deeper an underground mine, the greater the expense to mine it. For example, since walkways, belt lines and airways are longer, they require more maintenance to keep them free of debris. Long belt lines particularly require nearly constant maintenance so they can keep pace with coal production.
Mr. Fielder said the old mine workings are a constant challenge because the federal Mine Safety & Health Administration (MSHA) requires they meet current regulations if they are used in any way for coal production. He said this applies to areas mined years ago which now provide only access to the current workings.
"The tipple has been open for 39 years," said Mr. Fielder. "We're bringing it up to 1990 safety standards. Well, it's almost like rebuilding the whole thing because of how much the law has changed since 1952."
"The Sunnyside mines also have the dubious distinction of being very gassy," said the mine manager. He was referring to methane, a potentially explosive gas formed naturally from the decay of vegetative matter, that seeps out of the coal when it is mined.
The company checks the safety of the air underground and whether mining equipment, such as conveyors that haul coal outside, are operating with what Mr. Fielder describes as a state-of-the-art atmospheric monitoring system located above ground. Much of the larger mining equipment, such as the conveyors, are equipped with switches that shut off the electricity to prevent fire and explosions when enough methane gas accumulates.
Because of the age, depth, and expansiveness of the underground workings of its mine, Sunnyside Coal is spending a lot of money to improve efficiency by gradually upgrading equipment, said Mr. Fielder. But because the company is new and privately owned, it is limited in its ability to secure large amounts of money quickly, he said.
One of the large expenditures the company made recently was to purchase a new coal face conveyor and a Joy Manufacturing shear for the longwall it uses at Sunnyside.
Of the approximately 620,000 tons of coal it mined last year, Sunnyside Coal sold about 565,000 tons to Geneva Steel in Vineyard, Utah County. Geneva blends Sunnyside coal, which is of high-volatility metallurgical quality, with medium-volatility coal it purchases from out-of-state sources to make coke, one of the principal ingredients of steel making.
The rest of Sunnyside Coal's production last year - which filled an ocean vessel carrying 55,000 tons - was sold to Chugoku Electric Co. of Japan. Mr. Fielder said Sunnyside Coal expects to produce about a million tons of coal this year with 550,000 tons expected to go to Geneva Steel and the remainder to industrial users in the United States and abroad.
Sunnyside Coal is expected to run out of coal at its current mine site sometime in the late 1990s, said Mr. Fielder. By then, the company will have decided whether to develop the North Lease, north of its current operations.
The company also is suing to block Pike Coal Co., a subsidiary of Cleveland-based BP America, from selling its B Canyon coal leases to Zeigler Coal Co., headquartered in Fairview Heights, Illinois. Sunnyside Coal alleges Pike illegally backed out on a deal to sell its coal leases to Sunnyside Coal.
Mr. Fielder said Sunnyside Coal still is waiting to hear whether Zeigler Coal will exercise a 90-day option to purchase the B Canyon leases, also north of the current Sunnyside operations. He said if Zeigler passes up the deal, it is his understanding Sunnyside Coal gains the first option to buy the leases.
Since the coal in B Canyon can be mined with longwall, generally allowing the efficient recovery of more coal at costs lower than other mining methods, Sunnyside Coal would prefer mining it rather than its North Lease, said Mr. Fielder. The North Lease must be mined with continuous miner, a machine which removes or "cuts" the coal from the seam, where it simultaneously falls on a conveyor and then is removed to a shuttle car or larger conveyor system.
But whatever the outcome of the B Canyon dispute, Mr. Fielder said Sunnyside Coal is positioned for the future because it at least has the option of mining its North Lease when current reserves are exhausted.
April 18, 1989
Sunnyside Reclamation and Salvage signed a contract with Geneva Steel to furnish 840,000 tons of coal over the next two years from the Sunnyside No. 1 and No. 3 coal mines. The first shipment by rail took place on April 18, 1989. (Deseret News, April 24, 1989, "Tuesday")
April 2, 1990
Sunnyside Reclamation and Salvage, Inc. changed its name to Sunnyside Coal Company. (Documents on file with Utah Division of Oil Gas and Mining, ACT0070007)
Coal was shipped by train from the Sunnyside mine as late as October 1990.
The last train operated between Columbia Junction and the Kaiser loadout at Sunnyside in 1991. (email from James Belmont, May 27, 2003)
The Sunnyside Power Company, located in the town of East Carbon, was constructed to make use of the waste coal that had accumulated over the years of operation of the Sunnyside mine, and the Hiawatha and Wattis mines, as they were being reclaimed after mining operations were closed. The plant burns about 500,000 tons of waste coal each year and has a capacity of 58 megawatts. (Documents on file at Utah Geologic Survey) (Documents on file at Utah Division of Air Quality)
Kaiser Coal still existed at the time of a settlement between Kaiser Coal and the United Mine Workers retirement fund in December 1994.
The Sunnyside mine consisted of approximately 14,385 acres, of which 2,022 were leased federal coal lands. The Sunnyside mine was the first coal mine in the United States to use the longwall method of coal mining. The mine closed in 1994 due to filing Chapter 11 bankruptcy of Kaiser Coal Corporation and Kaiser's reclamation bond was forfeited by the U. S. Bankruptcy Court to the Utah Division of Oil, Gas, and Mining. Reclamation was completed in 1999. (Documents on file at Utah Division of Oil, Gas and Mining)
March 25, 1994
Sunnyside Coal Company filed for Chapter 11 bankruptcy on March 25, 1994 to reorganize its company. In 1995, the Chapter 11 bankruptcy was converted to a Chapter 7 bankruptcy to terminate Sunnyside Coal's existence, settle all claims, and liquidate all assets. The March 1994 bankruptcy came as a result of Sunnyside's coal supply contract with Geneva Steel that was not renewed by Geneva Steel. Part of the bankruptcy settlement included transfer of funds for the reclamation of the Sunnyside mine property at the mouth of Whitmore Canyon. The funds transfer took place in January 1997 and reclamation work began in July 1997, with final completion in October 2000, at a final cost of $2 million. (Office of Surface Mining, Reclamation and Enforcement (OSMRE), Abandoned Mine Land (AML) Awards, Utah, 2001)
"In March , Carbon County seized all assets of Sunnyside Coal. At the time the county said that the company owed them $400,000 in back taxes. They did it because they felt the company was selling off its assets and there would be nothing left to cover the county’s tax lien. The point of the action, where the assessor actually went to the mine and marked all property that it had been seized, was for a tax sale that was to take place in April. However in mid-April it was learned that the company had filed for bankruptcy protection in federal court." (Sun Advocate newspaper, January 5, 2012)
Kaiser Steel History
Kaiser Steel Corp.'s former plant occupies about 1,800 acres in Fontana, San Bernardino County, California. The plant operated from 1942 through late 1983. The plant consisted of three main units: a primary production unit, a rolling mill, and two slag disposal areas covering approximately one square mile.
October 25, 1983
Kaiser Steel ceased operations at its Fontana steel plant. (The San Bernardino County Sun newspaper, October 22, 1983, "next Tuesday")
California Steel Industries, Inc., purchased the rolling mill from Kaiser in August 1984. Cuyahoga Wrecking Corp. purchased the coke plant and blast furnaces in the primary production unit for salvage and began dismantling them in 1985.
California Steel bought the rolling mill portion of the plant. The steel making portion, including the blast furnaces, and the more modern Basic Oxygen Process Caster, built in 1978, was sold to a Chinese steel company that dismantled the entire facility and reassembled it at a location in the Guangxi region.
In February 1987, Kaiser filed for protection under Chapter 11 of the Federal bankruptcy code. Kaiser emerged from bankruptcy in September 1988, retaining the Kaiser Steel Corporation name.
February 13, 1987
"The Kaiser Steel Corporation said today that it had filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code." (New York Times, February 13, 1987)
October 1990 -- Reorganized as Kaiser Steel Resources, Inc.
June 1993 -- Name changed to Kaiser Resources, Inc.
June 1995 -- Name changed to Kaiser Ventures LLC.
November 4, 1992
California Steel Industries sold the former Kaiser Steel blast furnaces and other "front-end" steel making operations at the former Kaiser Steel Fontana site, to Capital Iron and Steel Corporation of Beijing. The Chinese company had offered Kaiser $60 million for the steel-making facility when it was initially closed in 1982, but Kaiser had refused the sale. Ten years later, California Steel accepted an offer of $20 million. The Chinese company sent 300 workers to the site to dismantle and prepare the components to be shipped to China. (New York Times, November 4, 1992)
(see also: Time magazine, January 24, 1994, "Dispatches Industrial Flea Market")
(see also: Los Angeles Times, August 4, 1985)
Sunnyside Mine, 1896-1943
Sunnyside mine -- Information about the Sunnyside coal mine prior to being purchased by Kaiser Steel
Kaiser Unit Coal Trains -- Information about the unit coal trains that ran between Kaiser's coal mines at Sunnyside and Carbondale, and kaiser's steel plant at Fontana, California.
Utah Fuel Company -- Information about the history of Utah Fuel Company, originally a subsidiary of D&RGW railroad.