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SUMMARY
<br />Current Operational Status
<br />The McClane Canyon Mine is an active underground coal mining operation. The mine area encompasses
<br />2,560.5 acres, of which 1901.3 acres are projected to be affected by mining. Permitted surface
<br />disturbance is 11.1 acres. Coal is mined underground using room and pillar techniques. Maximum annual
<br />coal production is 500,000 tons, with a projected production of 300,000 to 500,000 tons per year.
<br />Permittin Hg istory
<br />Initial site development work at the McClane Canyon Mine (McClane) was conducted under a USGS
<br />approved exploration plan effective December, 1976. The Colorado Mined Land Reclamation Division
<br />(now the Colorado Division of Reclamation, Mining and Safety) issued a three year permanent regulatory
<br />program permit on April 6, 1982, fora 248 acre permit area. The existing access haul road and the portal
<br />bench face-up developments were in place prior to issuance of the 1982 permit, and no topsoil had been
<br />salvaged from these areas. This permit was renewed on July 5, 1985, for an additional three year permit
<br />term. The mine was in temporary cessation from January 17, 1984 to November 17, 1988, when coal
<br />production was resumed. On January 27, 1992, the permit was renewed for a five year term.
<br />The 1992 renewal incorporated a permit revision which added 2,312 acres to the permit area, and
<br />proposed construction of a haul road which would connect the McClane Canyon permit area to the
<br />adjacent Munger Canyon permit area, (both mines are operated by the same permittee). There were
<br />relatively brief periods of coal production between 1992 and 1999, but for much of this time the
<br />operation was in temporary cessation. On March 3, 1993, the Division approved a permit transfer from
<br />Salt Creek Mining Company to Grand Valley Coal Company (GVCC). On December 3l, 1996, the
<br />Division approved a permit renewal (RN-04) for a new five year term, expiring July 6, 2001.
<br />On August 17, 1999, the Division approved a permit transfer from GVCC to Lodestar Energy, Inc. (LEI).
<br />On December I, 1999, operational status was officially changed from temporary cessation to active. LEI
<br />initiated coal extraction operations at the mine the week of February 21, 2000, and active operations have
<br />continued to the present time (November 2006) under LEI and CAM Mining LLC, the current permittee.
<br />To date, coal produced at the mine since operations resumed in 2000 has been trucked to the Xcel Energy
<br />Cameo Power Plant near Palisade, Colorado.
<br />LEI filed for bankruptcy on March 30, 2001, and operated the mine for a period of time as a debtor in
<br />possession. [n May 2003, certain LEI assets including the McClane Canyon operation were acquired via
<br />bankruptcy auction by Central Appalachia Mining, LLC (now CAM Mining Inc.) (CAM). On June 26,
<br />2003 the Division received an application for Succession of Operators (SO-3) to transfer the permit from
<br />LEI to CAM. The transfer was delayed due to delinquent federal lease royalty payments owed to BLM by
<br />LEI. These issues were resolved, and BLM approved assignment of the federal coal leases on 11/4/04
<br />(effective 12/1/04). The Division issued a proposed decision approving the permit transfer to CAM on
<br />November 17, 2004. The transfer decision was final on December 17, 2004.
<br />On February 14, 2005, the Division approved a permit renewal (RN-OS) for a new permit term expiring July
<br />6, 2006.
<br />There was one enforcement action issued for operations at McClane Canyon Mine since issuance of the
<br />RN-OS renewal permit. NOV CV-2005-008 was issued to CAM on October 26, 2005 for failure to maintain
<br />upland diversion culverts and a haul road culvert in accordance with approved designs and applicable
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