REV02237

• Permit No: C1981015
• IBM Index Class Name: Revision
• Doc Date: 8/8/1991
• Doc Name: Letter on Mistake on SR1 & Request to Increase Bond
• From: MLRD
• To: AMERICAN SHIELD COAL CO
• Type & Sequence: SR1
• Media Type: D
• Archive: No

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MINED LAND RECLAMATION DIVISION
Department of Natural Resources
1373 Sherman St., Roam 215
Denver. CO 60203
303 866-3567
Rax: 303 632-8706
STATE OF COLOR-ADO ~~
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Roy Romer,
Govemar
frea R. Banta.
Division Director
August 8, 1991
Mr. Jack Crichton
American Shield Coal Company
10830 N. Central Expressway
Suite 175
Dallas, TX 75231
RE: Bond Reduction at the Fruita Mine (C-81-015)
Dear Mr. Crichton:
The Mined Land Reclamation Division approved and accepted a
reduction of the liability bond for the Fruita No. 1 and 2 Mines
from $141,000 to $90,000 in September, 1990. The reduction was
granted because planned disturbance was never fully implemented and
because partial reclamation of the site was done.
Following an Office of Surface Mining oversight inspection, the
Division realized that a portion of the bond reduction was
improperly approved. Rule 3.02.2(4)(d) of the Colorado Mined Land
Reclamation Board Regulations for Coal Mining allows for a
reduction of bond if methods of operation change, as was the case
at Fruita. However, the Division cannot reduce bond as a credit
for reclamation work. Liability for completed reclamation work can
only be reduced through the bond release process outlined in Rule
3.03. Therefore, the Division must rescind that portion of the
Fruita bond reduction granted as credit for reclamation work.
The Division has estimated the cost of reclamation work completed
prior to the bond reduction as $5380 (see enclosed Reclamation Cost
Summary). In order to adjust the bond properly the Division
proposes the following approach.
The original $141,000 bond should have been reduced by $45,620 to
$95,380 due to the fact that planned disturbance never completely
occurred. The Division improperly reduced the bond to $90,000. The
Division also proposed to release sixty percent ($54,000) of the
remaining bond on April 1, 1991 following a Phase I bond release
request from the operator. Sixty percent of $95,380 is $57,228.
Rather than the proposed release of $54,000, the Division will now
propose to release $57,228. This will leave a bond of $38,152 in