The company pleaded guilty to breaches of the Health and Safety at Work Act at Teesside Crown Court in relation to the two separate incidents at the Boulby mine, near Loftus in the North York Moors, in 2016 and 2019.
The mine, which produces fertiliser and polyhalite, is a major employer in the area.
The Health and Safety Executive brought the prosecution after two sub-contracting electricians, Tom Moulton and Thomas Dixon, were both left with severe burns to their faces, necks and hands while working at the site.
An 'arc flash' occurs when a powerful electrical current leaps across a space, leading to explosions, high temperatures, the release of gases and falling debris and shrapnel.
The court heard that in the 2016 case, upgrades were planned to the mine's substation and its circuit breakers ahead of the move to polyhalite production. Power was routed through the breakers, and a copper bar carrying 11,000 volts would then send the power to the required function.
Removal and replacement of the circuit breakers was part of the project, and Schneider were contracted for the work, which was to take place during a site shutdown. However, some power to the mine had to be maintained for the purpose of safety features such as pumps, so backfeeds were fitted on some breakers that bypassed others to keep the supply.
Tom Moulton and his colleague Trevor Dolling were further sub-contracted by Schneider to remove the circuit breakers, and as they worked they found that the nuts and bolts would fall into other breakers. At one point, Mr Dolling's hand was within inches of contact with three live feeds of 11,000 volts as he reached to retrieve a bolt.
Mr Moulton also retrieved a bolt from another breaker, but as he did so noticed that the inner parts were dirty and decided to use a vacuum cleaner. The resulting explosion blew him 1.6 metres to the ground with force, and left him with burns to 20 per cent of his body, mainly his face, arms and hands, the latter of which caught fire. He spent two weeks under sedation in intensive care, suffered respiratory tract infections, underwent skin grafts and has been left permanently disfigured and only able to work in an office-based role.
Cleveland Potash's defence relied on their criticism of Schneider's project management, but Judge Jonathan Carroll dismissed their argument and asserted that the 'central failings' were under the responsibility and control of the mine.
Judge Carroll laid out findings including the fact that there was no individual in the role of system controller with overall responsibility for the programme of works until 2017, communications were via email rather than face to face, and that crucial information about the live feeds had not been passed on to the contractors.
A written document about the plans was found to have not been adapted or amended when changes were made, errors were not corrected and it was 'misleading'.
In addition, Cleveland Potash had not carried out its own risk assessments and permission to work documents were 'inadequate' - stating that the circuit breakers were 'dead, isolated and safe' when in fact some were not. The form was described by Judge Carroll as 'not accurate or reliable, and a mere process rather than a tool."
He absolved Mr Moulton of criticism as the documentation the electrician was given indicated that the equipment was safe.
In the second incident, in 2019, Thomas Dixon was working in the Motor Control Centre, where each cubicle had a lockable isolator. However, the switch only made the outgoing current dead, not the incoming, and this could be over-ridden by total isolation through opening the main breaker. Cleveland Potash had an obligation to isolate the current.
There was also an enhanced protection system against overloads which would have reduced the arc flash's duration and intensity, but this was found to have never functioned or even been connected, while the circuit breaker's protection setting was too high.
Mr Dixon had limited training in isolation and had not been given a permission to work form, as they were not issued as standard above ground for jobs involving less than 250 volts.
After working at the rear of a cubicle where the current was isolated, he made a 'simple error' at the front without realising it was a mirror image of the rear. His hands were within 20mm of 415-volt live cables which would likely have killed him if contact had been made, and the flash left him with burns to eight per cent of his body. He has since made a full recovery.
Judge Carroll found that there was no method statement or risk assessment, no supervision or safe system of work, major defects to the Motor Control Centre and inadequate PPE worn.
The deficiencies had been identified before the incident but concerns had not been acted upon.
Cleveland Potash had been the subject of previous enforcement and improvement notices from the HSE, including one following an arc flash in 2015 that was attributed to equipment failure and another regarding a collision between underground shunting engines in the same year, for which they accepted a caution.
Judge Carroll added:"I have read a letter from chairman Andrew Fulton, and accept the company is genuinely remorseful. They are not a company which displays a cavalier attitude to safety and they did have systems in place to address many dangers.
"There has since been a reinvigorating of the health and safety environment, with new staff who have taken on the task, and the situation is wholly improved. They have a strong and positive relationship with their staff and are a major employer making a positive contribution to the local area."
As well as the £3.6million fine the company, which has a turnover of £50million and was described as 'loss-making but solvent', was ordered to pay the full £185,000 prosecution costs.
Speaking after the hearing, Health and Safety Executive inspectors Neil Bettison and Vincent Fowler, who spent six years investigating and building a case, said: "It was a complex investigation and our opinions in recommending prosecution had to be justified. It's quite a high fine, as the outcome was very serious for Tom Lawton and could easily have resulted in fatalities.
"Mining electrical systems carry a lot of hazards that are always there. Controls need to be in place continuously. The mining sector in this country has not recorded a fatal electrical accident since 1997, but that was about as close as we've come to that since.
"The investigation found serious failings, but with the full co-operation of Cleveland Potash, effective systems have been put in place to ensure that anyone working with electrics at the mine remains safe. It took six years of work to get this outcome."