2014-11-13_INSPECTION - C1981012

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October 22, 2014 C- 1981- 012/New Elk Mine LDS Inspection Topic Summary NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA Not Applicable Y - Air Resource Protection Y - Roads R - Availability of Records Y - Reclamation Success Y - Backfill & Grading Y - Revegetation R - Excess Spoil and Dev. Waste NA - Subsidence NA - Explosives Y - Slides and Other Damage Y - Fish & Wildlife Y - Support Facilities On -site R - Hydrologic Balance Y - Signs and Markers R - Gen. Compliance With Mine Plan R - Support Facilities Not On -site NA -Other Y - Special Categories Of Mining R - Processing Waste Y - Topsoil COMMENTS This was a complete inspection by Leigh Simmons of Colorado Division for Reclamation, Mining and Safety, (the Division). The inspection was accompanied by John Terry of New Elk Coal Company, (NECC). The weather was fine. Several permitting actions are in progress, these are detailed under the heading GENERAL MINE PLAN COMPLIANCE. The status of the New Elk Mine is Active. At the time of the inspection the mine was producing coal, but no coal was being shipped. NECC were experimenting with a new production process, with the aim of enhancing recovery and reducing the amount of coal that ends up on the RDA, in a cost effective manner. Raw coal was being screened using a machine, like those used in the sand and gravel industry, that had been leased. Some of the fine fraction was being put to one side; the precise amount was still undecided, but it was in the region of 30% of the mined coal. The plan was to wash just the remaining 70% (coarse fraction) and blend the washed coal with the screened fraction to produce a mixture with the required properties. At the time of the inspection NECC were preparing to ship two more loads of coal for test burns (one to Pueblo and the other to Albuquerque, NM), each of which will be on the order of 5000 tons. AVAILABILITY OF RECORDS — Rule 5.02.4(1): The technical services building was in the process of being prepared for return to the company it was leased from. The records had been moved to a new office, to be occupied by John Terry and Ron Thompson, next to the east entrance to the workshop building. The records were generally in good order, but some files had not been updated and the recent move made the customary piles of loose papers harder than usual to locate. Detailed comments are made at the end of this report. EXCESS SPOIL and DEVELOPMENT WASTE — Rule 4.09 Placement; Drainage Control; Surface Stabilization: The two permanent development waste piles (DWP and DWDA 2) appeared stable. Number of Partial Inspection this Fiscal Year: 2 Number of Complete Inspections this Fiscal Year: 2 Page 2 of 13