BNSF 8258 West with units 8258/9260/9255 make the turn from the former Northern Pacific main line at Sarpy Jct, MT heading to the mine for reloading on 7-11-06.  Curious about the two mines along the former Northern Pacific between here and Forsyth, MT I asked for information on the Montana Railfans group on Facebook and got this great reply from Mark Meyers which answers a lot of questions:.

The Colstrip branch (from Nichols, west of Forsyth) was built by the NP originally to tap coal reserves to power steam locomotives. The Sarpy branch from Sarpy Jct. extends 36 miles south to the Absaloka mine (railroad station name: Kuehn). The mine opened in 1974, and the track was built about the same time. Now owned by Westmoreland coal, the mine shipped its last car of coal in April of this year although the mine is not officially shut down. Originally, the switch at Sarpy Jct. only opened east, but in 2013 a west leg of the wye was constructed to allow loaded coal trains to operate west (to export at Roberts Bank, BC). This business was short-lived, and now the line faces abandonment because the Absaloka mine was its raison d’etre. On the other hand, the track might not immediately be pulled up – the Colstrip branch, for instance, has only been used for intermittent car storage for years – no coal train business. All the coal mined at Colstrip goes to the nearby power plants.

More info from Mark below:

From another source: The Sarpy Creek line was built in 1973, in anticipation of the mine opening in 1974 and didn’t appear in a timetable until the 09/15/1974 Billings Region. One quirky bit of trivia was that the Sarpy Line (the 14th subdivision of the Yellowstone Division) had one intermediate siding between Sarpy Jct. and Kuehn, named “Bob.” Between Sarpy Jct. and Bob, there was an industry track at station “Mike,” and between Bob and Kuehn, an industry track at station “Walt.” Both Mike and Walt had a capacity of only 7 cars (obviously for setting out bad orders), while Bob was a 7,400-foot siding. I can’t remember who these guys were, but I believe they were all BN company officers at the time the line was constructed. Today, the line is BNSF’s Sarpy Line subdivision, and Bob is no longer with us, but Mike and Walt still show as industry tracks. And of course Walt is not to be confused with Walter, a siding installed on the Laurel subdivision near Broadview (north of Laurel) to accommodate coal traffic and from the Signal Peak coal mine. Walter is named for Walter Breuning, who was world’s oldest man. Breuning worked for the Great Northern Railway for 49 years until age 66 and actually saw James J. Hill and is probably one of the few railroaders to get more out of Railroad Retirement than paid in. He was just short of his 113th birthday when the siding was commemorated in 2009, and he passed away in 2011 at age 114, the oldest man in the world, and third oldest person (two women were older).