Dakota Southern Railway

The Mitchell–Kadoka line is part of a former secondary branch built by Chicago, Milwaukee, St. Paul and Pacific Railroad, better known as The Milwaukee Road, between Marquette, Iowa and Rapid City, South Dakota between 1880 and 1907. The line lost profitability and at the risk of being abandoned by Milwaukee Road, it was embargoed in 1980 and subsequently bought by the South Dakota Department of Transportation, which still owns the tracks. The purchase was orchestrated by Governor Bill Janklow.

Dakota Southern also operated a line 82.4 miles (132.6 km) from Napa Junction to Platte, South Dakota, which was also constructed and owned by the Chicago, Milwaukee, St. Paul and Pacific Railroad. The operation lasted from 1985 to 1989 before Dakota Southern stopped operating the line. Dakota Southern has since reinstated operations on this line as far as Tabor, almost 30 years after the last train left the line.

The railway originally hauled large amounts of grain, but this business became unprofitable in the late 1990s. Between 2000 and 2007, the railway had just one customer—a folding carton printing plant, not a box factory as often reported, in Mitchell, and thus no trains passed that point. In 2005, however, the railway obtained a haulage agreement with BNSF to allow it to operate to Sioux City, where it could interchange with the Union Pacific Railroad and the Canadian National Railway, making grain service profitable again. After track repairs, service briefly resumed as far as Presho, South Dakota in fall 2007. While the line still officially operates all the way to Kadoka, as the Kadoka-Rapid City portion was rail-banked in 1996, a grade crossing in Vivian is currently paved over, as well as one in Belvidere.

Controversy

In December 2017, Dakota Southern Railway was found to have stored rail cars full of liquid natural gas, more commonly known as butane, on a siding at the South Dakota Wheat Growers facility in Kennebec. A federal inspection found that they had been sitting there far too long, and cited 11 counts of hazardous material violations.

Further investigation found that Mike Willams, one of the co-owners of Dakota Southern, had signed a contract giving away 1.4 miles of siding to Bruce Terminaling LLC, a company that Mike Willams also owns. This contract was not presented to the South Dakota State Rail Board, and due to this, a discussion about terminating the lease of Dakota Southern on the Rapid City–Mitchell (MRC) line came about, but this never came to fruition.