The desert mountain that fooled New York bankers is now Utah’s best photo spot

Atlas-Dirty Devil’s $9 Million Factory Butte Fiasco

Factory Butte hides a tale of greed and bad math in Utah’s desert.

In 1977, the Atlas-Dirty Devil Mining group got $9 million from Marine Midland Bank based on claims of rich coal deposits. Experts said 27 million tons of coal lay ready for the taking.

Yet when mining began in 1978, things fell apart fast. The coal was junk, the land was full of faults, and costs shot up.

After just one train of coal left the site, the whole thing went bust.

Today, the stark landscape of Factory Butte stands as a monument to this 1970s get-rich-quick scheme gone wrong.

Investors Pitched a Desert Gold Mine in Summer 1977

Some hopeful businessmen calling themselves Atlas-Dirty Devil Mining showed up at Marine Midland Bank in summer 1977 with big plans. They wanted $6 million to dig up coal near Factory Butte in Wayne County, Utah.

Their pitch came with a fancy geology report from J.W. Miller & Associates claiming the site held nearly 27 million tons of coal ready for strip-mining. James Miller himself flew to New York to tell bank officials about this Utah coal bonanza.

The bank liked what they heard but wanted another opinion before writing such a big check.

The Bank Hired Their Own Experts to Check the Facts

Marine Midland brought in Keplinger & Associates in August 1977 to make sure Miller wasn’t just talking big.

Keplinger looked over Miller’s work and gave it a thumbs-up, saying his math checked out and followed industry standards.

Their report backed claims that Factory Butte had plenty of coal for a major strip mining operation. They even tested coal samples that seemed good enough for power plants.

With two expert firms now saying this was a solid bet, the bank got ready to open their wallet.

Money Started Flowing in November 1977

The bank gave the green light to the coal project in November 1977 after both reports painted such a rosy picture. They agreed to loan $6 million to get the strip mine going at Factory Butte.

Money began flowing to Atlas-Dirty Devil Mining, who quickly put it to use.

Everyone felt sure the mine would pay off big, thanks to those glowing assessments and profit forecasts.

Bulldozers Started Tearing Up the Desert in June 1978

Atlas-Dirty Devil Mining fired up their heavy machinery in June 1978 and began ripping into Factory Butte’s dusty landscape.

Workers trucked coal 80 miles across the desert to reach the railroad loading spot at Green River, Utah. Test shipments went by rail to Nevada Power’s plant in Moapa for them to try out.

The remote location made everything harder from day one, with long supply lines and tough desert conditions challenging the miners.

Cracks in the Plan Started Showing by Fall 1978

Workers kept hitting problems as they dug deeper into the coal seams that fall. The ground wasn’t stable – it slumped, rolled, and had small faults running through it.

Coal coming out looked nothing like the high-quality stuff promised in those fancy reports. The seams kept changing thickness with layers of rock mixed in, making it much harder to get clean coal.

Miners worried as costs went up and coal quality went down.

The Bank Had to Keep Throwing Good Money After Bad

Marine Midland found itself stuck pouring more money into the struggling operation. Their investment grew past $8 million as the mining company kept hitting unexpected problems.

The cost to dig out each ton of coal shot way up because of all the geological headaches. Trucking expenses ate up profits since the mine sat so far from the railroad.

Keplinger sent regular updates to the bank, each one grimmer than the last, as the project spiraled downward.

One Lonely Train Was All They Had to Show for Millions

The mine filled just one train with coal during all of 1979. That single shipment made it to Nevada Power, but the numbers didn’t work.

Mining costs had skyrocketed because of the bad ground and poor-quality coal. The remote desert location meant trucking costs alone made the operation lose money.

After millions spent, that lone coal train was all they had to show before operations stopped.

Consultants Finally Admitted They Got It All Wrong

Keplinger came clean to Marine Midland in March 1979 with bad news. Both consulting firms had completely missed the mark on their coal assessments.

The quality and amount of usable coal at Factory Butte fell far below what they’d promised. Almost none of the coal could be mined at a profit.

The bank realized they’d poured millions into a project based on reports that were flat-out wrong about the basic geology.

The Mining Company Crashed and Left a Mess Behind

Atlas-Dirty Devil Mining filed Chapter XI bankruptcy, unable to pay back the more than $8 million they’d borrowed. The mine shut down for good, leaving investors with nothing.

Mining equipment, buildings, and piles of poor-quality coal sat abandoned across the desert site.

The once-promising venture became a financial disaster, with nothing to show but debt and a scarred landscape in the Utah desert.

Utah Taxpayers Got Stuck with the Cleanup Bill

The state of Utah had to spend $116,000 cleaning up the abandoned mine site.

Buildings, machinery, and coal heaps cluttered the Factory Butte area for years after the company disappeared. Some cleanup costs came from the company’s bond, but the rest came from state funds.

The beautiful desert landscape around Factory Butte bore ugly scars from the failed mining attempt, with rehabilitation taking years to complete.

Lawyers Had a Field Day as the Blame Game Began

Marine Midland took both consulting firms to federal court, suing them for $9 million in damages.

They claimed Miller & Associates and Keplinger & Associates made negligent misrepresentations that cost the bank millions.

The legal battles dragged through the early 1980s as everyone pointed fingers about who was responsible for the Factory Butte fiasco.

The case became an important precedent for holding consulting firms accountable when their reports lead to financial disasters.

Visiting Factory Butte, Utah

Factory Butte Recreation Area is 12 miles west of Hanksville on Utah Highway 24, then turn right on Coal Mine Road.

The BLM manages this free area where you can learn about the failed Atlas-Dirty Devil coal mining venture from 1977. Any vehicle can reach it on the maintained gravel road when dry.

You’ll find restrooms and interpretive kiosks explaining the mining history. Camping is allowed on BLM lands with designated areas near the butte.

This article was created with AI assistance and human editing.

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