The state will pay an undisclosed amount to Utah Railway Co. as settlement for damage done to the company's line in Spring Canyon by an abandoned mine reclamation project of the Utah Division of Oil, Gas and Mining.

Dumayne Gilson, president of Utah Railway, a small railroad that hauls coal from several mines in Carbon County to Provo, said the six-tenths of a mile of track torn up by the contractor was valued in excess of $200,000.The line in Spring Canyon was not being used for hauling coal because no mines are operating there now.

Gilson said the settlement was reached after two or three weeks of daily negotiations. He described it as "big bucks," but said the out-of-court settlement was less than the track's $200,000 value because about half of the rails were salvageable. The company sold the other half of the tracks as scrap.

Gilson said the contractor, who had been promised part of the materials as partial payment for his work, had hauled off most of the ties. He said the Division of Oil, Gas and Mining will also have to pay the contractor, Ned Mitchell Co. of Altamont, an additional amount because he is not getting the materials he was promised.

"They (the division) failed miserably in their research," Gilson said.

Mary Ann Wright, administrator of the abandoned mines project, said, "It was an honest mistake. We looked at county plat maps and there was no indication that the strip of land on which the rail line is located was owned separately from other lands. State officials got right-of-entry permission from the other owners, she said.

Gilson said the state representatives at first contended the railroad company did not own the land and had not paid taxes. "We were able to prove ownership, that we regularly paid taxes and made reports to the Interstate Commerce Commission," he said.

The reclamation project, begun last August, was intended to remove hazardous buildings left from past mining operations, to move or bury old coal piles and to revegetate the area. Cost was about $650,000. Most of the old mine portals have already been closed. About 70 were closed in another project in the summer of 1985.

Gilson said about 21/2 miles of undamaged line remain in Spring Canyon, but the company has no plans to rebuild the damaged section because none of the mines are operating.

Six mining camps dotted Spring Canyon at one time. Many of the mines opened just before World War I and continued through the Depression and World War II. At one time, more than 800 miners and their families lived in Spring Canyon, located just west of Helper.