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assigned to a particular structure or its materials will change during the time for which the overall reclamation is <br />bonded. One common problem in the setting of a salvage value for a particulaz item is the assumption that its value <br />will remain constant, with no reduction in its value over time. <br />The usual change in an onsite structure's value is, of course, a reduction in value, due to a combination of factors, <br />including ongoing mine-related use, natural weathering or deterioration, and vandalism. Even new structures at <br />well-guarded sites experience decreases in their values; the values of aging and weathered structures at poorly- <br />guarded sites decrease more rapidly. Plus, if the operator wishes to lessen the amount or rate of decrease of the <br />salvage value of a structure, it is imperative that precautions be taken to provide for site security, and to monitor <br />and maintain the structure. <br />Please also refer to Hard Rock and Metals Rules 4.3.9 (Salvage Value), 4.3.10 (First Priority Lien on Project- <br />related Fixtures and Equipment), and 4.9.3 (First Priority Lien -Fixtures and Equipment). These rules explain the <br />additional need for an operator to ensure that the State has clear title to the salvaged item. This mechanism acts the <br />same as the assignment of a bond to the State. <br />To assign a meaningful salvage value, therefore, requires that a structure's condition be verified on a frequent basis <br />Please refer to Rule 4.1.2(5), which describes the operator's obligation to annually file an independent certification <br />of the item or structure whose salvage value is being used as part of the posted bond. <br />The costs of the process of setting the salvage value and regularly reviewing it are additional to the operator's <br />normal annual fees. Please also refer to Rule 4.1.2(9)(a)-(d), which explains the operator's burden ofpaying the <br />Division an annual fee for establishing and reviewing the bond (salvage value). <br />In summary, without the practices of safeguarding and maintaining the condition of an item, the filing of the <br />outside certification, payment of the fees for the annual review and verification of the (bond) value of an item, and <br />the agreements and assurances in place giving the State the priority lien for the (value of that) item, this office <br />cannot approve a reduction in bond amount for salvage value. <br />The costs of the tasks of demolishing the superstructures and slabs of the buildings onsite, and the backfilling of the <br />rubble into an onsite pit, are estimated figures based on can-ent operating costs, taken from the Caterpillar <br />Performance Handbook and Contractor's Reference Guide. These utilize current labor, fuel and equipment rental <br />costs. They additionally incorporate actual productivity figures from the DMG Abandoned Mine Land program's <br />reclamation and closure projects. <br />You stated that the demolition should take 2 weeks and not 3 weeks. The demoliton task sheet contains a figure of <br />80 hours, or 2 weeks. This task actually includes more than just building demolition; it includes removal of <br />miscellaneous debris, ventilation fans from the remote sites, plus plumbing and electrical. If you have production <br />figures that better represent these reclamation needs, please provide them. Otherwise, this office must retain these <br />cost figures in the estimate. <br />5) The issue of allowing salvage value for the NC-owned electrical transformers is also guided by the <br />requirements set forth under item 4, above. While there may be salvage value and a market of willing buyers for <br />used electrical transformers, the State does not include those in its bond estimates. Again, it is the operator's <br />burden to provide the necessary figures, fees, and agreements for establishing these items as part of the bond. <br />6) The grading of the dump slopes is required as part of the reclamation plan, to the extent that a 2:1 gradient is <br />attained (as discussed under item 2, above). You stated that the coarse and angular nature of the waste rock will <br />preclude the ability to move it with scrapers. This point is well taken. Therefore, while the need to move the <br />material remains, costs for this task will be revised to utilize different types of equipment. Equipment to be <br />considered includes a large tracked excavator and large dozer. <br />