The UP's monopolistic practices prompted Utah's Mormons to cheer the construction of the competing Denver and Rio Grande Western Railroad (D&RGW or Rio Grande), built from 1881 to 1883. This new railroad traversed the foot of the Book Cliffs, soon discovered to be Utah's richest coal deposit. In 1881 a railroad geologist pinpointed a deposit suitable for locomotive fuel which soon became the Castle Gate Mine. In 1882 the D&RGW acquired the Pleasant Valley Coal Company and Railroad, founded by Sanpete Mormons in 1875. It completed its Book Cliffs coal and transportation combination with the acquisition of Sunnyside--the only Utah deposit of quality coking coal (a derivative used in smelting) in 1899.

However, this impressive industrial growth proceeded in the face of three major challenges. The first was labor. Most railroad workers were immigrants, lured by labor agents with false promises of wealth from Italy, China, Finland, Greece, the Balkans, Japan, and Mexico. Often brought in as strikebreakers, most remained, eventually joined the union, and helped give the area its distinctive ethnic mix. Miners complained about short weights (the basis for their pay); the necessity of living in company town and trading at the company store (where appreciably higher prices prevailed); safety concerns (in which the company was consistently exonerated by a pro-business judiciary); and the need for company recognition of the union. All these complaints led to repeated strikes.