Laserfiche WebLink
eNT OF Ty <br />Q�p -ym United States Department of the Interior "w.. <br />N � <br />BUREAU OF LAND MANAGEMENT <br />_ Colorado State Office <br />c y .eA9 2850 Youngfield Street <br />Lakewood. Colorado 80215-7210 <br />www.co.blm.gov <br />AUG 0 3 2017 <br />In Reply Refer To: <br />3485 (CO -921) <br />COC 1362 <br />COC 67232 <br />The Honorable John Hickenlooper <br />Governor of Colorado <br />136 State Capitol <br />Denver, CO 80203-1792 <br />Dear Governor Hickenlooper: <br />The Bureau of Land Management (BLM) is processing an application for a royalty rate reduction <br />(RRR) frotn Mountain Coal Company LLC (MCC) for the West Elk Mine. MCC is requesting a <br />RRR from 8 to 5 percent for the remaining portions of the E -seam reserves due to adverse <br />geologic conditions where a split exceeds 6 inches in thickness (approximately 10.3 million tons <br />in leases COC 1362 and COC 67232). When a split is 6 inches thick or thicker, it is not <br />economic to mine the E seam as one unit due to increasing impurities and ash introduced from <br />the parting. In order to minimize high ash during longwall production, MMC uses a 4 -pass <br />shearer to selectively cut the parting in order to stockpile high ash or send rock directly to a <br />refuse pile. Adverse conditions also include weak roof and areas with sandstone channels in the <br />roof. Areas with weak roof and sandstone channels in the roof require supplemental roof support <br />and continuous miner cuts as short as ten feet to install roof support more quickly. These non- <br />standard practices reduce productivity and increase operating costs. <br />A RRR in areas where the parting exceeds 6 inches would encourage MCC to recover more coal, <br />extend the mine life and increases overall coal recovery. Without a RRR, it is possible that MCC <br />would shorten the panels and recover less of the coal that is split; or even cease operations <br />without recovering the area of the E seam that is not split. Without a RRR, the potential also <br />exists for the West Elk Mine to bypass the areas applied for due to high operating costs, thereby <br />losing the opportunity to recover the coal in the area where adverse geological conditions <br />continue to exist. Any reduced recoverability would result in cutting off the last access to the <br />remaining federal coal reserves, rendering it bypassed, and losing any royalties for the coal that <br />would have been paid to federal and state governments. <br />The BLM is proposing to approve the RRR from 8 percent to 5 percent for the entire area where <br />the split exceeds 6 inches in thickness for a period of 5 years, effective February 1, 20I5 (draft <br />