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<br />August 22, 2006 <br />Seneca Coal Company (SCC) <br />P.0 Box 670 <br />Hayden, CO 81639 <br />Seneca R Mine <br />Phase I bond release inspection <br />August 7-l 1, 2006 <br />Participants: <br />Roy Karo, SCC <br />Jay James, SCC <br />Sandy Brown, Colorado Division of Reclamation, Mining, and Safety (DRMS) <br />Mike Boulay, DRMS, <br />Henry Austin, Office of Surface Mining (OSM) <br />I participated in a Phase I bond release inspection of the Seneca II Mine as indicated above. <br />Federal coal was mined at the Seneca II Mine, and OSM is a co-payee on the reclamation surety <br />bond. DRMS administers the bond release process in part through the State- Federal Cooperative <br />Agreement found at 30 CFR, Part 906.30. OSM provided notice to the Bureau of Land <br />Management (BLM) prior to the inspection, and BLM chose not to participate. Weather <br />conditions were hot and dry, and ground conditions were dry throughout the mine. <br />The application and subsequent correspondence in the record document that SCC provided <br />notifications of the bond release inspection as required by Colorado Rule 3, Performance Bond <br />Requirements. These notifications included the surface and mineral owners of the permit area <br />proposed for release, surface landowners adjacent to the permit area, local, State, and Federal <br />governmental agencies, utility companies, and the public at large. None of the interested parties <br />notified chose to participate in the inspection. Grassy Creek Holding Company, LLC, contacted <br />Mr. Boulay to acknowledge receiving notification of the inspection, and to ask general questions. <br />DRMS has not received any other comments concerning the proposed bond release. <br />Mr. Boulay began the inspection on August 7 by orienting the inspection participants to the <br />inspection protocol including the requirements of Colorado Rule 3, Performance Bond <br />Requirements, and the Colorado Guideline Regarding Selected Coal Mine Bond Release Issues <br />dated April 18, 1995. Mr. Boulay proposed methodology to inspect the areas proposed for <br />release. The proposed release includes all the areas affected by coal removal and subsequent <br />reclamation (approximating 2,300 disturbed and reclaimed acres) on the Seneca II Mine permit <br />area. We discussed approximate original contour restoration and surface water runoff control, <br />which are the 2 principal reclamation requirements to be completed in accordance with Colorado <br />Rule 3 and the approved DRMS permit in order to secure Phase I bond release. <br />