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• <br />The expansion program was supported with an investment of approximately <br />five million dollars (f5,000,000) in new equipment designed to increase <br />overburden removal capacity and increase coal recovery. This equipment <br />included four additional 6576 scrapers and a Fiat-Allis HD41B bulldozer. <br />In October of 1978, Kerr Coal executed a one year purchase order with <br />Union Electric Company of St. Louis for the delivery of 500,000 tons of <br />coal over the succeeding twelve months. In November of 1979, this <br />purchase order was renewed for an additional three years. The renewed <br />purchase order calls for the delivery of 500,000 tons of coal per year <br />through 1982. <br />In addition, in 1978 Kerr Coal began engineering and design work to <br />construct a new primary crushing facility to handle production increases <br />form its Marr Strip Mine necessary to meet its obligations to Union <br />Electric Company. The crushing and loading plant was designed to load <br />• rail cars at the unit train loading rates specified in the purchase order <br />with Union Electric Company. <br />In 1979 Kerr Coal continued to strive to meet production requirements. <br />However, because of delays in obtaining adjacent federal coal reserves <br />first applied for in May 1975, and because of insufficient fee coal <br />reserves currently under permit, Kerr Coal had difficulty meeting is <br />existing contractual obligations. In 1979, Kerr Coal also submitted a <br />permit application to the Colorado Mined Land Reclamation Division (CMLRD) <br />to affect compliance with the newly enacted Colorado Surface Coal Mining <br />Reclamation Act. The application was approved with stipulations and the <br />permit issued on March 20, 1980. The permit was reviewed and renewed with <br />additional stipulations in late 1986. <br />Since 1974 the mine has operated continuously with gradual increases in <br />production levels to a peak in the late 1970's and early 1980's. With <br />changing market conditions, production declined and has fluctuated in <br />response to demand through most of the 1980's. <br />At present, prevailing market conditions, coupled with operational and <br />economic constraints make previously planned expansion of mining <br />-2R- Revised - August, 1990 <br />~_ , t...~..~__....-- - <br />