2015-12-16_GENERAL DOCUMENTS - C1981022

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ENT OF T,y QPa q Poi _ �2 V gRCH 3 �8 In Reply Refer To: 3485 (CO -921) COC61357 COC70615 United States Department of the Interior BUREAU OF LAND NIANAGEI\,IENT Colorado State Office 2850 Youngfield Street Lakewood, Colorado 80215-7210 www.co.blm.gov The Honorable John W. Hickenlooper Governor of Colorado 136 State Capital Denver, Colorado 80203-1792 Dear Governor Hickenlooper: DEC 042015 RECEIVED DEC 16 2015 DNISION OF RECLAMATION MINING & SAFETY We are processing an application for a royalty rate reduction from Oxbow Mining, LLC., for the Elk Creek Mine. Oxbow has applied for a royalty rate reduction from 8 percent to 5 percent based on adverse geologic and engineering conditions. Conditions affecting the mine include increased depth of cover, brittle and fractured rock, shale partings, greater methane release and the increased occurrence of sand stone channels. Oxbow has applied to reduce the royalty rate for the reserves in leases COC61357 and COC70615, approximately 13.1 million tons. We are proposing to approve the royalty rate reduction for up to 13.1 million tons for a period of 4 years (decision enclosed). Although production at the mine has been idled indefinitely since the end of 2013, and in March of 2015, the last coal was sold out of inventory, the royalty rate reduction would be retroactive to December 1, 2012, because December would be the first full month beginning after the November 8, 2012, date of application. We would appreciate your comments within 30 days of receipt of this letter. If you have any questions, please contact Charlie Beecham, PE, Chief, Branch of Solid Minerals, at (303) 239-3773. Sincerely, Ruth Welch State Director Enclosures I - Draft decision (3 pp) 2 — Form 1842-1 "Information on Taking Appeals to the Interior Board of Land Appeals (2 pp)