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1. BACKGROUND: THE KING II MINE, OSMRE REVIEWS, AND INTERIOR <br />MINING APPROVALS <br />The King II mine, which was constructed and began operation in 2006, is an underground <br />coal mine located near the town of Hesperus, Colorado in La Plata County. The mine is <br />currently permitted by the State of Colorado to produce up to 1.3 million tons of coal. Because a <br />portion of the coal mined by GCC underlies tribal lands, the mine also has a federal permit for its <br />coal mining operations. <br />GCC primarily extracts coal from federal leaseholds. According to the State of Colorado, <br />in total, the permitted mining operations contain 1,296 acres of federal coal, while 722 acres are <br />state-owned and 640 acres are privately owned. Pictures of the surface facilities at the mine are <br />below. <br />Entrance to the King II mine. <br />Coal pile at King II mine. <br />2 <br />