REV01625

• Permit No: C1980006
• IBM Index Class Name: Revision
• Doc Date: 7/23/1993
• Doc Name: BOND CALCULATION MARR STRIP MINE C-80-006
• From: DMG
• To: KERR COAL CO
• Type & Sequence: SL1
• Media Type: D
• Archive: No

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STATE OF COLORADO
DIVISION OF MINERALS AND GEOLOGY
Department of Natural Resources
1313 Sherman 51., Room 215
Denver, CO 80203
Phone: [phone]
FAX: [phone]
July 23, 1993
Mr. Jim Cooper
Kerr Coal Co.
1200 17th Street
Suite 2350
Denver, CO 80202
Re: Bond Calculation
Mari Strip Mine, C-80-006
Dear Mr. Cooper:
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Roy Romer
Governor
Michael B. Lang
Division Director
Per our meeting in June concerning the Marr Strip Reclamation Bond, the Division has
reviewed the 1986 bond estimate and the 1993 bond estimate. This review was performed
to see if the mining operations of the Marr Strip achieved the worst-case reclamation liability
as calculated in 1986 and, if not, is a bond reduction warranted.
Marr Strip's current bond amount of 55.5 million represents the bond value set in the
February 1987 settlement agreement. In 1986, the Division's reclamation cost estimate of
the maximum reclamation liability was calculated using three methods; cost estimates were
57.0 M, 58.6 M and 59.2 M. The 58.6 M figure was used and proposed to the mine
operator. This figure was based on the actual disturbance in 1986. This was for backfilling
5.5 Myds3 in the 720 pit and 1.3 Myds' in Pit 1 from the OB-1 pile. The total overburden
stockpiled in OB-1 used in these calculations was 6.8 Myds3.
Recent volumetric analysis of the OB-1, performed by Aero-Metric in the spring of 1993,
put the current volume of OB-1 at 5.5 Myds3. Correspondence from ACZ stated that about
1 .5 Myds3 from OB-1 has been backfilled in the 720 pit in the past several years. Thus, the
"worst case" volume for OB-1 using recent volumetric and backfill would be about
7.0 Myds3. This volume is close to the volume used in the Division's 1986 calculations.
The approval of TR-07 revised the reclamation of Pit 1 to allow highwall reduction instead
of backfilling from OB-1. The material from OB-1 would still be backfilled to the 720 pit.
The net change would be a decreased hauling distance. This would have somewhat
reduced the 1986 reclamation cost estimate of 58.6 M, but not down to 54.5 M.
In summary, given that 1.5 Myds3 have been backfilled from OB-1 since the 1986 bond
estimate, the difference between the previous bond of 55.5 M and the current liability of
54.5 M appears to represent a reduction of liability due to backfilling and grading. As
previously stated, reductions based upon reclamation work completed must be implemented
by the phase release process. We cannot change the position which was stated in our
March 16, 1993 notification letter.