AT APPROX. 2:15 PM THE SAFETY DEPT.RECEIVED A CALL FROM THE SLURRY PLANT OPERATOR THAT A SMOLDERING FIRE STARTED IN BETWEEN THE WALLS OF THE UPPER SANDS DAM SHACK. THE OPERATOR WAS ASSIGNED TO REMOVE PIPE OUTSIDE OF THE BLDG.& INSTALLING NEW HAND RAIL ON WALKWAY. OPERATOR FINISHED CUTTING THE PIPE OUTSIDE UPPER SAND DAM SHACK & MOVED HIS EQUIPMENT TO START A NEW RAIL WHEN HE SAW SM