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<br />~[]/'~O/~ legal . • <br />1111 VV ~/ 555 Seventeerih St:ee! <br />Denver, Colorado ef1?02 <br />Telephone 303'2 4246 <br />Fan 303 293 4008 <br />/ r' <br />R. Kirk Mueller <br />Senor Attorney <br />March 17, 1998 <br />Ms. Susan McCannon <br />Coa] Program Supervisor <br />Colorado Division of Minerals and Geology <br />i 313 Sherman Street, Suite 215 <br />Denver, Colorado 80203 <br />Re: West Elk Mine -Permit Transfer Issues, Permit No. C-80-007 <br />Dear Susan: <br />RECEIVED <br />MAR 1 g 1998 <br />Division of Minerals & Geob9lr <br />Our thanks to you and David Berry for meeting yesterday afternoon with Ed Harris and <br />me to discuss our permit transfer questions involving Mountain Coal Company ("MCC"). We <br />appreciate your guidance on what procedures should be followed to accomplish both of these <br />changes. <br />In the first transaction, Mountain Coal Company, a Delaware corporation, will be <br />converted into Mountain Coal Company, L.L.C., a Delaware limited liability company ("MCC, <br />LLC). This "new" legal entity will continue to operate and control the mine and associated <br />facilities, so changes to the permit would be very limited. Reviewing Rules 2.03.4 and 2.08.6 of <br />the Regulations of the Colorado Mined Land Reclamation Board for Coal Mining, it appears the <br />only changes may be adding "L.L.C." after MCC's name and adding a statement to the permit <br />text regarding the internal reorganization pursuant to Rule 2.03.4(1). The remainder of the <br />information contained in the existing permit would remain accurate and current. As addressed in <br />Rule 2.08.6 et. seq., the performance bond and insurance policies (except perhaps the name <br />change) would remain the same for MCC, LLC as they are for MCC. Simply stated, MCC, LLC <br />would remain, as MCC is now, a wholly owned subsidiary of ARCO. <br />In the second transaction, the ownership of MCC, LLC will likely be conveyed to a joint <br />venture company owned in large part by a new company. ARCO may retain a small ownership <br />interest. This transaction will probably occur sometime around the first of June. MCC, LLC <br />would continue to hold the permit and operate the mine. However, this transaction gives rise to <br />several changes of particular interest to the Division. Performance bonding would have io be <br />assumed by the new joint venture company, new insurance coverage would need to be arranged, <br />and the names of new officers and directors would be subject to an AVS check. <br /> <br />QIIBnIIL Ricnfietl Cm~p~Y <br />