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MONTGOMERY WATSON Mining Group iii iiiiiiiiniu iii sss September 6, 2000 Ms. Sandra L. Brown Senior Environmental Protection Specialist Colorado Division of Minerals 8~ Geology 1313 Shem7an Street -Room 215 Denver, Colorado 80203 (303) 866-3567 RECEIVED SEP 2 r 2000 Dmsion of Miners g Geology Re: Kerr Coal Company - Marr Mtne (Permit No. G80-006), Application for Partial Phase I and Phase II Bond Release Deaz Ms. Brown: The State of Colorado, through the Colorado Department of Natural Resources (DNR), currently holds a reclamation bond in the amount of $1,817,911 as surety for final reclamation of mining disturbance areas associated with Kerr Coal Compan}~s (Kerr) Marr Mine and Loadout neaz Walden, Colorado. V~ith this application, Kerr is requesting a Phase I partial bond release for the Kerr Loadout Area and a Phase II partial bond release for the 720 Pit and Pit 1 areas of the Marr Mtne Area. Phase I panial bond release is requested for the 6.9 acres reclaimed during 1999 in the Kerr Loadout Area for completion of final backfilling, grading, and drainage control in compliance with the approved reclamation plan and in accordance with applicable regulatory provisions. The requested Phase I partial bond release amount is based on 60 percent of the estimated total reclamation cost for this azea or $8,472. Phase II partial bond release is requested for a total of 172.6 acres in the 720 Pit and Pit 1 reclaued azeas where Phase I bond release has already been approved and vegetation has been successfully reestablished to support the approved postmining land use and in compliance with applicable revegetation success cover standards. The requested Phase II panial bond release is based on 25 percent of the estimated total reclamation cost for these azeas or $1,121,972. The total requested bond release amotmt is $1,130,444. Kerr has received DMG approval to retain the mine shop/office/warehouse and associated yard area, rttute access road, Sedimentation Ponds A, B, D, and E, the two water supply wells (one at the mine and one at the Loadout) and the Loadout shop building and access road, in conjunction with the approved postntinutg ]and use. Of the 42.7 acres that aze currently not reclaimed, approximately 34 acres of disturbance are associated with the approved permanent facilities, so only approximately 9 acres of minor road and pond reclamation remain. The total requested partial bond release amount is $1,130,444. Release of this amount will result in a remaining surety balance of $687,467, which is approximately three times the calculated remaining liability of approximately $229,516. The accompanying partial bond release request and supporting documentation address all applicable provisions of Rules 3.03.1(2)(a) and (b) for partial bond release. In order to facilitate and expedite DMG review of this bond release apphcation, Kerr has assembled, cortsolidated, and provided, as appendices to this application, extensive supporting documentation including the following: P.G. Box 774018 Te l: 970 879 6260 1475 Pine Grove Road Fax: 970879 9048 Serving the World's Environmental Needs Steamboat Springs, Colorado 80477