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Assessment Office ~, ' .Office of Surface Mining May 17, 1979 Page Two The operation is an exploration activity being conducted by SEI in accordance with its approved exploration plan. we have been advised by legal counsel that Section 502(a) of the Surface Mining Control and Reclamation Act of 1977 ("SMCRA") therefore does not apply. Section 512 (a) of SMCRA makes it clear that exploration operations on federal lands are not regulated by the Act. Instead, exploration operations on federal lands are regulated in accordance with the Mineral Leasing Act of 1920 ("MLA"), as amended. Under the regulations which implement the MLA, the USGS is given the sole authority to regulate all facets of exploration operations on federal land. As stated above, the SEI activity is an exploration operation, operating according to a valid approved exploration plan. For this reason, the OSM inspector did not have jurisdiction to issue this alleged violation. Therefore, no penalty should be assessed for any of the violations discussed below. During his inspection, the OSM inspector identified the following alleged violations at the exploration site: 1. The first alleged violation was for "opening or developing a site for surface coal mining operations (which include underground mines) without a state permit, in violation of 30 USC ~ 502(a)." The operation at McClane Canyon is not a mining operation; it is an exploration activity being conducted with all the requirements of the effective USGS approved exploration plan. This plan includes environmen- tal and reclamation performance considerations designed to control adverse environmental impacts. Since the OSM in- spector did not have jurisdiction to issue this violation, we urge you not to assess a penalty for the alleged viola- tion. 2. The second alleged violation states that SEI failed "to pass all surface drainage from (the) disturbed area through a sediment pond." Once again, we would like to point out that the operation at McClane Canyon is an exploration operation and that, as a result, the OSM inspector lacked the jurisdiction to issue this violation. _ SEI normally maintains a siltation basin on the exploration site. As evidence of this, we are submitting an inspection report which shows that, on March 21, 1979, Fred Banta, an inspector with the P1LR, visited the McClane Canyon explora- tion site, and found a siltation basin in place (see Attach- ment No. 1). On May 9, 1979, when the OSM inspector visited