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III IIIIIIIIIIIII III DIVISION OF MINERALS AND GEOLOGY Drp,trlmcvv ni NdWr,tl Rosuurtcs 111 1 tihcnndn 51.. Room 215 Drnrcr, Colorado HI L'J S Vln mr•: l HI b I1h6~ lib- FA\ 1 i0 41 11 ; !-741116 DATE: January 21, 1999 T0: Larry Routten "\. ~jL.1 FROM: Dan Mathews ~" / RE: Red Canyon Bond Release, Subsidence Issue Petmit C-81-034 We have discussed certain legal questions related to obligations and responsibilities of DMG and the permittee (MINREC, INC.), regarding subsidence at the Red Canyon Mine. You asked me to pose the specific questions 1 had, and also outline the issue for Steve Brown's consideration. II~~~ DEP.ARTfv1ENT OF NATURAL RESOURCES Ray Romer Governor lames 5 Lochhead Execuuve Direcmr Michael B. Long Division Director In the fall of 1998, MINREC, INC., submitted a request for final bond release for the Red Canyon Mine, a small underground coal mine near Cedaredge. Mining was re-initiated by Grand Mesa Coal Company (GMCC) in 1978 or 1979 (there had been previous mining at the site dating to the early 1900's). GMCC submitted a permanent program permit application for the operation in 1981; the permit was eventually approved by DMG in 1984. Mining operations ceased in 1985 due [o unfavorable economics. The operation was subsequently sold to MINREC, INC., and the 23 acre surface disturbance area was reclaimed in the fall of~ Activity since that time has been limited to environmental monitoring and site maintenance. 7Yks As required by regulation, [he operator notified surface landowners of the bond release application, and DMG notified landowners of the bond release inspection, which took place on December 1, 1998. Two landowners with homes constructed over or adjacent to undermined areas attended the inspection, and pointed out minor cracks in walls and foundations which they thought might have been caused by mine subsidence. I described my observations in the inspection report, and forwarded a copy of the report along with photos I took, to Jim Pendleton for his review. Jim felt that ground settling not related to subsidence could very well have caused the damage I described, but was unable to make any definitive judgement, and he will probably need [o do his own inspection. The questions I have are theoretical at this point, but assuming it is determined that either of the houses in question has been damaged by subsidence, what are the obligations of the operator and DMG? It seems clear that Rule 4.20.3 would require the operator to repair, replace, or compensate the owner if the dwelling had been in place prior to approval of a mining permit, but that is not the case here. The dwellings were consttucted several years after mining had been completed, and the mine had been sealed and reclaimed. The Hudson house had been built in 1996, and [he Truitt house had been built in 1992. Mining adjacent to the Hudson house occurred in 1979 or 1980, and mining beneath the Truitt house occurred in 1980, based on the mine plan maps. The operator had notified landowners whose property was over or immediately adjacent to undermined areas, in certified letter of August 19, 199;. The letter explained the location and extent of mine workings, and noted that there was a "remote possibility that subsidence could occur" on their property. Our records indicate that properties currently owned by Hudson and Truitt were owned by other individuals at that time. Does the obligation of the operator and the Division extend only to dwellings in place prior to approval of a mining permit for the area in question? Or does it extend to dwellings constructed after permit approval, but prior to undermining, or does it extend to dwellings constructed after undermining but prior to final bond release, or would there be some obligation on the operator and the Division for structures constructed even after bond release? STATE OF COLORADO