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William A. Bear <br />Page 3 of 5 <br />September 29, 2014 <br />25. BRL indicated in its September 12, 2014 response letter that it is negotiating with <br />Terror Creek LLC to purchase the Terror Creek Loadout to be permitted as a coal <br />mine waste disposal area. It remains uncertain as to whether the property will <br />ultimately be permitted as a waste disposal area, and if so, whether the property <br />would provide ample storage space for the material to be generated by the Spruce <br />Stomp reserves. <br />Based on the following information, it appears that BRL does not have adequate <br />storage space in its existing refuse disposal areas to handle the refuse material that <br />will be generated by mining in the Spruce Stomp lease area: <br />• Map 14B indicates that the Spruce Stomp lease area will extend coal production <br />through 2019. <br />• BRL reported 3.3 million tons of coal produced in 2013; information provided in <br />the quarterly refuse area inspection reports indicate that 844,429 tons of refuse <br />were placed in the existing refuse disposal areas in 2013. That suggests a ratio of <br />roughly 255,888 tons of refuse generated per 1 million tons of coal produced. <br />• In 2014, 1.4 million tons of coal were produced in the first half of the year, with <br />528,517 tons of refuse placed. That suggests a ratio of roughly 377,512 tons of <br />refuse generated per 1 million tons of coal produced, with is a higher ratio of <br />refuse to coal than observed in 2013. <br />• Based on the 2014 rate of refuse generation, as much as 5 million tons of refuse <br />(6,493,500 CY, based on a conversion factor of roughly 1.3 CY of refuse per ton <br />of refuse) would be produced by the end of 2019. This includes the Spruce <br />Stomp lease area, which we estimate could alone generate as much as 3 million <br />tons (3,896,100 CY) of refuse. <br />• The total design capacity of Gob Piles #2, #3, and #4 combined is 4,165,000 CY. <br />Gob Pile #4 has reached capacity. A generous estimate of the remaining capacity <br />(combined) in Gob Piles #2 and #3 would be approximately 1.5 million CY. <br />• Subtracting 1.5 million CY of remaining capacity in Gob Piles #2 and #3 from <br />roughly 6.5 million CY of refuse expected to be produced between now and the <br />end of 2019 (which includes 3.8 million CY from the Spruce Stomp lease area) <br />indicates that BRL needs to provide a plan for on -site disposal, off - site - disposal, <br />or both of 5.0 million CY of refuse. <br />Please therefore provide a plan for the disposal of 5 million CY of refuse. If our <br />estimate of 5 million CY is in any way incorrect, please let us know. <br />Rule 2.05.6 — Mitigation of the Impacts of Mining Operations <br />Rule 2.05.6(3) — Protection of the Hydrological Balance <br />31. Issue resolved; BRL revised page 2.05 -126 as requested. <br />Rule 2.04.7 — Hydrology Description <br />Rule 2.04.7(1) — Ground Water Information <br />