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III IIIIIIIIIIIIIIII <br />999 <br />STATE OF COLORADO <br />pIVISION OF MINERALS AND GEOLOGY <br />Uepartmen[o( Na[ural Resources <br />1313 Sherman 51., Room 215 <br />Denver, Colorado 80203 <br />Phone, (3031 866-3567 <br />FAX: (303)832-8106 <br />6 August 2001 <br />Mr. Henry Bazbe <br />Mountain Coal Company LLC <br />P.O. Box 591 <br />Somerset CO 81434 <br />Re: Bond Liability Update for RN-04 <br />Dear Mr. Barbe: <br />DIVISION OF <br />MINERALS <br />GEOLOGY <br />RECLAMATION <br />MINING•SAFETY <br />Bill Owens <br />Governor <br />Greg E. Walther <br />Executive Director <br />Michael B. Long <br />Divison D~renor <br />As indicated on the documents approving Mountain Coal Company's application for renewal of <br />the permit for the West Elk Mine, the bond liability for the operation has dropped considerably <br />from the previous figure based on the Division's recalculation. Enclosed is a summary of the <br />Division's calculations. <br />A brief explanation of the readjustment is simply that our figures aze based on greatly decreased <br />demolition costs. Our figures for structural demolition costs show a decrease of 31 % for that <br />activity. Concrete demolition costs show an even more dramatic decrease -around 60% for <br />most activities. Since a lazge proportion of the reclamation activity at the West Elk Mine <br />consists of these tasks, the overall result has been a significant decrease in the bond liability. <br />If you have any further questions, please call me. For specific questions about the bond <br />calculations, please call Jim Stazk directly at 303-866-3567. <br />Tim Burnell <br />Envirorunental Protection Specialist <br />