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Utah's only strip mine is running out of coal while state regulators consider its owners' plan to tap another 297 private acres on scenic agricultural land outside Alton.

Approval would allow the Coal Hollow Mine to double annual output to nearly 1 million tons and extend its life four years.

But Alton Coal Development's pattern of missed deadlines and lax restoration projects raises questions about whether the mine, south of the tiny Kane County town, can responsibly expand into new terrain — including another 3,600 acres of federal land coal company executives hope to lease.

Alton Coal Development has deviated from the mining methods approved in its permits and failed to properly reseed reclamation areas, backfill mine pits in the time allotted, properly reconstruct Lower Robinson Creek and rehabilitate 355 acres of off-site sage grouse habitat, according to documents filed with the Utah Division of Oil, Gas and Mining (DOGM).

The company was also fined $3,200 for improperly constructing ditches that released sediment-laced wastewater.

State mining regulators twice have rejected Alton's request that they release a $10 million bond set aside for the mine's first phase because the company has yet to complete reclamation work.

Still, says DOGM's deputy director, Dana Dean, the violations have since been largely corrected and Alton should not be construed as a bad actor.

"We've had to threaten it, but we never issued a cessation order," Dean said. "It's just a normal part of coal mining.

"It's a matter of human nature that not everything gets done perfectly," she added. "The reclamation they have done looks really good. They haven't had a lot of off-site impacts."

Old technology, new to Utah • Alton is among the smallest of Utah's nine remaining coal operations and the only one mining the surface — a completely different method than the underground techniques used in Utah's coal-producing heartland around the Wasatch Plateau and Book Cliffs.

State mining regulators had little prior experience with strip mining, and Dean conceded her division was partly to blame for Alton's failings by not fully communicating expectations.

"There has been a learning curve for the state for our permitting and inspection staff," she said. "A lot of the problem is the learning curve on both sides."

Earlier this year, however, inspection reports and DOGM officials' communication with the company suggest an increasing level of exasperation with Alton.

Documents describe a broad array of problems: water valves left open, allowing ponds to overflow; reseeded areas being eroded or covered in sediments, allowing cheat grass to take hold; poorly constructed banks sloughing into ponds; containment structures that don't contain sediment-bearing discharge water; and powdered coal covering vegetation along a creek.

The bond — held by the state in case the company does not complete all its required mitigation work — is more troubling.

The company was not supposed to start work on the third and final phase of the Coal Hollow Mine until the state released the bond for the mine's first phase.

But mining division managers determined the mitigation fund for the mine's first phase was underfunded by at least $2.7 million, prompting officials to require Alton to increase its bond or risk getting shut down, according to a memo Dean sent to company officials in December.

On Thursday, Dean said Alton increased its bond and has since completed the required reclamation work, although the company has yet to reapply for the release of the bond, now totaling $13 million.

The company has estimated total reclamation costs for all three phases of its current operation at $32 million — a sum equal to the value of an entire year of coal production from the strip mine.

Kirk Nicholes, the environmental point man for the Cedar City-based company, hung up on a Tribune reporter asking to discuss the company's plans and challenges.

And Nicholes, as well as mine manager Larry Johnson and lead investor Bob Nead of Florida, did not respond to a follow-up e-mail.

Why let Alton expand ? • The problems may not reflect well on how the company would conduct itself on a large tract of federal coal it has long sought to lease. That coal, under Bureau of Land Management and private land east of town, is the subject of an environmental review currently out for public comment.

The BLM will host a string of public forums on the proposed lease this week in Cedar City, Panguitch and, on Wednesday, Salt Lake City.

The town of Alton, which occupies an amphitheater-like basin tucked against the western flank of the Paunsaugunt Plateau off U.S. Highway 89, has seen coal operators come and go as they tapped the Smirl coal bed. The seam is up to 40 feet thick and lies close to the surface in many places.

For his part, Alton mayor Dustin Cox supports the mine's continued operation.

"The coal taken out provides power to keep the lights on at home and jobs," Cox said. "You can go and work and keep food on the table.

"Natural resources need to be developed for the benefit of the community and society to function."

The mine employs about 25 people and supports a fleet of 60 trucks each making two trips a day.

"Some are concerned about the trucks and the mine being closer," Cox said. But, "the majority benefit and like what they've done."

While no cows have returned to the current mine's reclaimed areas, the mayor said he likes what he sees.

"It has made the land so much more valuable to grazers than it was before," said Cox, a rancher who serves as president of the Kane County Farm Bureau.

"There is short-term sacrifice," he added. "But in the long term, it will be reseeded and it will be a better grazing pasture than it was before."

The expansion has drawn intense opposition because of the mine's proximity to Bryce Canyon National Park several miles to the east, increasing truck traffic on scenic highways, and the loss of habitat for sage grouse and other sensitive wildlife.

"They need to be telling people about their violations," said Nathaniel Shoaff of the Sierra Club. "Those could be things that have an impact on the user experience in the park."

Shoaff also was concerned that regulators don't know how many sage grouse have been displaced by the current operation.

Sierra Club's legal efforts to block the initial mine failed, and Alton has tried — unsuccessfully so far — to stick its environmental adversaries with hundreds of thousands of dollars in legal bills. The company alleges Sierra Club sued in bad faith in a meritless effort to harass it.

"It is a baseless claim to scare us away from opposing the proposed expansion to public land, and we are not backing down," Shoaff said.

Not the best coal • Alton's coal packs less energy per pound, but more ash and sulphur, than the high-quality coal coming out of the increasingly depleted Wasatch Plateau.

Alton Coal Development started digging in 2010 and has mined its 520-acre leasehold more quickly than expected.

The company's coal is trucked to the Intermountain Power Plant near Delta, but that station is expected to convert to natural gas in the coming years to address California's desire for cleaner power. So future production is expected to be trucked to a rail load-out to be built west of Cedar City for shipment to export terminals on the West Coast, according to a draft Environmental Impact Statement.

But as early as this year, Alton executives hope to shift operations onto pastureland a half mile southeast of town owned by the Heaton family and other private owners.

The company would use a mix of surface, highwall and underground mining methods to extract 3.9 million tons over the next four years.

Another 17.3 million tons of "overburden" soil and rock would be backfilled into the pit, regraded and seeded as mining operations progress.

The Alton area covers the southernmost margins of habitat still occupied by greater sage grouse.

Keeping the bird off the endangered species list is a major priority for several Western states because federal protection is expected to disrupt oil and gas drilling, grazing and other commercial uses of public lands.

Strip mining the habitat would inevitably sacrifice sage grouse mating and nesting grounds, so the state has required Alton to rehabilitate four acres of habitat elsewhere for every acre the mining activity disturbs — a common practice known as off-site mitigation.

As part of its current mine permit, Alton has treated some 1,600 acres of nearby habitat. But twice, Alton has failed to meet the overall rehabilitation obligation, according to DOGM files.

Dean says much of the work has gone well, but the Bureau of Land Management last year complained about shoddy work done on 355 federal acres where Alton cut invasive pinyon and juniper.

The trees can work against sage grouse by providing perches for raptors that prey on the ground nesters.

On Alton's mitigation site, trees were supposed to be cut to a stump height of no more than six inches. The "slash" wood was to be scattered, with pile heights kept below two feet high and log lengths shorter than 48 inches.

Photos of the treatment area, attached to a DOGM inspection report during lekking season last spring, show stumps towering among large unscattered debris piles far higher than two feet. Grouse can be seen ruffling their feathers in the background.

The report resulted in another notice of violation — Alton's fifth within a 12-month period — ordering the company to re-treat the area by June 23 so the debris scatter meets BLM standards and submit a plan for the 240 acres Alton contractors plan to treat this year.

The company met that demand without being fined, according to Dean.