2007-03-06_REVISION - C1994082 - Laserfiche WebLink

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IV. PROPOSED DECISION Based upon the above observations, the Colorado Division of Reclamation, Mining and Safety proposes to partially approve Seneca Coal Company's (SCC) request for a Partial Phase I Bond Release, SL-O1, for the Yoast Mine. The proposed decision will release the applicant from the liability for backfilling, grading and drainage reestablishment, as discussed in this document. SCC requested a Partial Phase I Bond Release for 188.1 acres. The Division is excluding 15.08 acres from the Partial Phase I Bond Release allowing 173.02 acres proposed for release. The Division is excluding the following areas (as shown on the Figure "Yoast Phase I Bond Release SL-Ol Map - Zoom Area"): the remaining light-use road that runs along the northern portion of the proposed bond release azea (4.90 acres), an area of gullies on the south and west edge of the proposed bond release area (6.25 acres), a highwall crack on the north and east edge of the proposed bond release area (0.81 acres), the entire length ofpost-mining drainage channel 10 (YPM-10, 1.37 acres), the entire length of post-mining drainage channel 13 (YPM-13, 1.31 acres) and the gully area above (southwest of) YPM- 13 (0.44 acres). Although Pond O11 A (0.85 acres) is within the North Pit bond release area, the pond itself is not being released with this Phase I bond release. PHASEIBOND RELEASE The Division currently holds a corporate surety in the amount of $5,200,000.00 from the Seaboard Surety Company (CS329873) for the Yoast Mine. The required surety for the Yoast Mine, prior to the Partial Phase I Bond Release, is $5,046,639.00. SCC requested a release of $611,023.00 in the Phase I bond release application. The Division is proposing to release $11,862.00. Pursuant to Rule 3.03.1(2) (a), "Up to sixty percent of the applicable bond shall be released when the permittee successfully completes backfilling, regrading and drainage control in accordance with the approved reclamation plan." The required bond liability for the Yoast Mine will be $5,034,777.00. The Division finds that this amount is sufficient to complete the approved reclamation plan at the Yoast Mine if the work had to be performed by the Division. The reason there is such a large difference in the amount SCC has requested for release and the amount the Division is proposing for release is detailed below. The Division uses a floating bond concept for backfilling and grading to calculate the reclamation cost estimate and, consequently, the required bond amount. During the initial five-year permit term of a surface mine the Division determines aworst-case disturbance for the mine and sets a liability amount for the mine's reclamation. This worst-case disturbance is based on a single year during the five-year permit term in which the greatest disturbance will occur. As the operator continues to mine during that permit term, the dollazs associated with the backfilling and regrading of a specific pit are "floated" to the next pit in the sequence. During successive five-yeaz permit terms, the Division performs aworst-case disturbance analysis for that permit term. If the worst-case disturbance is greater than it was in previous permit terms, the amount of bond required for backfilling and regrading is increased. If the worst-case disturbance is less than it was in the previous permit terms, the amount of bond required for backfilling and regrading remains constant (it is only adjusted for changes in equipment costs). In this way the monetary liability is "floated" from one pit to the next so that the only pit that has actual dollazs associated with it is the pit that is currently open (or the 12