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SUMMARY
<br />Current Operational Status
<br />McClave Canyon Mine is currently an inactive underground coal mining operation. On February
<br />15, 2011 the Division received notification from McClave Canyon Mining, LLC that the McClave
<br />Canyon Mine is in temporary cessation. The mine went into temporary cessation because its only
<br />customer, the Cameo PowerPlant closed at the end of December, 2010. McClane Canyon Mining,
<br />LLC has submitted the appropriate information required by Rule 4.30. When the mine is operating
<br />coal, it is mined underground using room and pillar techniques. Maximum annual coal production
<br />is 500,000 tons, with a projected production of 300,000 to 500,000 tons per year. The mine area
<br />encompasses 2,560.5 acres, of which 1,901.3 acres are projected to be affected by mining.
<br />Permitted surface disturbance is 17.65 acres.
<br />Permitting History
<br />Initial site development work at the McClave Canyon Mine was conducted under a USGS
<br />approved exploration plan effective December, 1976. The Colorado Mined Land Reclamation
<br />Division (now the Colorado Division of Reclamation, Mining and Safety) issued a three year
<br />permanent regulatory program permit on April 6, 1982, for a 248 acre permit area. The existing
<br />access/haul road and the portal bench face -up developments were in place prior to issuance of the
<br />1982 permit, and no topsoil had been salvaged from these areas. This permit was renewed on July
<br />5, 1985, for an additional three year permit term. The mine was in temporary cessation from
<br />January 17, 1984 to November 17, 1988, when coal production was resumed. On January 27,
<br />1992, the permit was renewed for a five year term.
<br />The 1992 renewal incorporated a permit revision which added 2,312 acres to the permit area, and
<br />proposed construction of a haul road which would connect the McClave Canyon permit area to the
<br />adjacent Munger Canyon permit area, (both mines are operated by the same permittee). There were
<br />relatively brief periods of coal production between 1992 and 1999, but for much of this time the
<br />operation was in temporary cessation. On March 3, 1993, the Division approved a permit transfer
<br />from Salt Creek Mining Company to Grand Valley Coal Company (GVCC). On December 31,
<br />1996, the Division approved a permit renewal (RN -04) for a new five year term, expiring July 6,
<br />2001.
<br />On August 17, 1999, the Division approved a permit transfer from GVCC to Lodestar Energy, Inc.
<br />(LEI). On December 1, 1999, operational status was officially changed from temporary cessation to
<br />active. LEI initiated coal extraction operations at the mine the weekof February 21, 2000, and active
<br />operations have continued to the present time (November 2006) under LEI and CAM Mining LLC,
<br />the current permittee. To date, coal produced at the mine since operations resumed in 2000 has been
<br />trucked to the Xcel Energy Cameo Power Plant near Palisade, Colorado.
<br />LEI filed for bankruptcy on March 30, 2001, and operated the mine for a period of time as a debtor
<br />in possession. In May 2003, certain LEI assets including the McClave Canyon operation were
<br />acquired via bankruptcy auction by Central Appalachia Mining, LLC (now CAM Mining Inc.)
<br />(CAM). On June 26, 2003 the Division received an application for Succession of Operators (SO -3)
<br />to transfer the permit from LEI to CAM. The transfer was delayed due to delinquent Federal lease
<br />royalty payments owed to BLM by LEI. These issues were resolved, and BLM approved assignment
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