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/\ Legai ~ ~y., SJ~[rvl (~'~C~Fnn,„y (~(IYIC~~+^~ _\!1P ARCO.r 555 Seventeenth Street -~'h A/~<<~du^y~--pp~" I - -- - - 3 ~ Denver. Colorado 8G202 Ed yx -~ /I~rTTP/1 b v~; r ! ,Mtn l ~ ~ /s/ ~~ ~ ~ ~~ ~ ~~ ~ ~~ ~~~~ ~~~ Telephone 303 29.3 4296 ~t ff 1{""N Fax 303 293 4098 ~~,~ u~ _ s , 0 ~i ~I r/t' Vlte1~.~' 999 R. Kirk Mueller RECEI~FED Senior Attorney Mazch 3, 1997 MAR 0 5 1998 Division of Minerals & Geology Mr. David Berry Colorado Division of Minerals and Geology 1313 Sherman Street, Room 215 Denver, CO 80203 Dear Dave: Thank you for meeting with Ed Harris and me yesterday. As we discussed, Mountain Coal Company ("MCC") will soon be reorganized. That process will involve the formation by MCC of a single member, wholly owned limited liability company subsidiary, to be known as Mountain Coal Company, LLC. The assets and operations of MCC will then be transferred to Mountain Coal Company, LLC. Our meeting was one of the preliminary steps we are taking to make the transition go as smoothly as possible. This letter will confirm our request for a decision on the appropriate administrative process for making the transition with the permit to mine. MCC is a Delaware corporation, and a wholly owned subsidiary of the Atlantic Richfield Company. Upon completion of the reorganization described above, Mountain Coal Company, LLC, a Delaware limited liability company, will remain a wholly owned second tier subsidiary of the Atlantic Richfield Company. Except for these structural changes, operations, property assets, and personnel at the West Elk Mine will all remain (virtually) unchanged. The purpose of this reorganization is to prepare for entering into a joint venture with another company in which all of ARCO's domestic coal assets are combined with those of another company with ARCO retaining only a small interest in the joint venture. We currently anticipate that such a joint venture may be established in two to three months. The reorganization of Mountain Coal Company offers certain tax advantages to the parties to the joint venture. Like a corporation, an LLC provides its owners with certain liability limits. Unlike a corporation, which is itself a tax-paying entity, a limited liability company allows for flow-through tax treatment. For several reasons, we believe this reorganization is best handled through a minor or technical revision rather than afull-blown permit transfer. Mountain Coal just renewed its permit (I understand the renewal was approved in January of this year) so the permit information on file should be current and complete. As a practical matter, the West Elk Mine will continue to operate under the same mine and reclamation plans which the agency recently approved. Perhaps most important, while ap~nac R~cm:oia Comcnr,