APPCOR10757

• Permit No: C1996084
• IBM Index Class Name: Application Correspondence
• Doc Date: 5/8/2001
• Doc Name: LORENCITO COAL CO LLC PERMIT C-96-084
• From: DORSEY & WHITNEY LLP
• To: DMG
• Media Type: D
• Archive: No

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999 DORSEY & WHITNEY LLP
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May ~, 2001
VIA FACSIMILE AND REGULAR MAIL
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Mr. David Berry C
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Division of Minerals and Geolo
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1313 Sherman Street, Room 215 ,~,,,,
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Denver, Colorado 80203 Y ~~ °~
RE: Lorencito Coal Company, LLC
Permit C-96-084

Dear Mr. Berry:
This letter is in response to your letter of May 4, 2001 to Jerry Koblitz regarding
Lorencito Coal Company's rail service to the project, and right of entry.
'Trinidad Railway filed a request for abandonment with the Surface Transportation Board
in !ate 2000. Thereafter, Kern Valley R:!i!mad (an affiliate of A R~ K Railroad) bnnght most of
the assets of the Trinidad Railway and took over responsibility for operating the railroad subject
to the STB proceeding. The railroad has a continuing common carrier obligation under Federal
law to provide shippers with rail service during the STB proceeding, including shipping coal
from the Lorencito project when that service is needed.
The STB had taken no final action. The proceeding was opposed by two groups, one of
which is offering to buy the railroad. If the opposing group is successful, it will be required to
provide service to Lorencito. Even if the STB issues an order approving the abandonment, the
process is not complete unless Kern Valley physically removes all of the track. During this
process, Lorencito has a[ least two adversarial courses of legal action it could independently
pursue to acquire the line because of the necessity of the line in providing rail service for the
project. However, Lorencito is currently negotiating with Kern Valley for an amicable lease or
sale of the line.