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May 25, 2016 C-1980-007/West Elk Mine LDS <br />In an effort to reduce costs, and in the light of the decision by the local utility company (Delta -Montrose <br />Electric Association, a member of the Tri-State co-operative) to increase the industrial rate for on -peak (i.e. noon <br />to 10 PM) electricity, MCC has adjusted the shifts of longwall mining to be during "off-peak" hours. <br />Several permitting actions are in progress: <br />Bond release applications SL -09 and SL -10 are complete and an inspection has been scheduled for the <br />week beginning June 20, 2016. <br />TR -138 was found complete on May 13, 2016. The public notice was published on May 18 and the date <br />for comments (May 28) passed with no comments received. The Division is in the process of updating the <br />Reclamation Cost Estimate. The proposed decision due date is July 12. <br />RN -07 was found complete on February 1, 2016. The initial adequacy review was sent to MCC on May 3. <br />A response was received by the Division on May 24. The proposed decision due date has been extended to June <br />30. <br />MCC had received approval from the BLM to mine up to the lease boundary; a technical revision for an <br />incidental boundary change is anticipated. <br />PROCESSING WASTE/COAL MINE WASTE PILES — Rule 4.10 and 4.11 <br />Drainage Control; Surface Stabilization; Placement: <br />Both refuse piles were inspected from above. The RPEE was still wet with melting snow, and the slope <br />face was too wet to touch with heavy equipment. MCC intended to avoid placing refuse on the RPEE for as long <br />as possible, using the lower RPE in the meantime. Very little refuse is expected to be generated in the foreseeable <br />future as the preparation plant is not expected to be run once the current contract is satisfied. <br />ROADS — Rule 4.03: <br />The road to the RPEE was in good condition. The road up Sylvester Gulch was easily passable, as were <br />the USFS roads above the main facilities area. <br />SLIDES and DAMAGE - Rule 4.12: <br />The minor surface slides around the site that have been noted in recent inspection reports had not yet been <br />repaired as the ground was still too wet. <br />SUPPORT FACILITIES - Rule 4.04: <br />The Deer Creek ventilation shaft was inspected, as well as the Monument Dam/Minnesota Reservoir. No <br />issues were observed. <br />DOCUMENTS RECEIVED <br />N/A <br />OTHER (SPECIFY) <br />N/A <br />Number of Partial Inspection this Fiscal Year: 7 <br />Number of Complete Inspections this Fiscal Year: 4 <br />Page 3 of 7 <br />