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National King Coal currently has approximately 693 acres under <br />• Federal lease, approximately 160 acres under State lease and <br />approximately 280 acres under private lease which afford <br />minable coal reserves to the underground room and pillar <br />operation. All of these lease areas are currently permitted <br />with Colorado DMG. The surface facilities at the mine are <br />located on approximately 11 acres of the private leased <br />acreage. <br />The total remaining recoverable reserves in coal bed 1 as of <br />September 1, 1997 contained on leased lands controlled by <br />National King Coal is approximately 2.4 million tons. Most of <br />the mine's remaining Federal coal reserves are contained in <br />COC 49465 and C-29125. Except for chain pillars, lease P- <br />058300 was mined-out in 1982 but is part of an LMU to provide <br />,( a right-of-way to access more recently acquired fee and <br />Federal reserves. <br />To provide for their current market demands, National King <br />Coal produces 200,000 to 250,000 tons of coal annually. Total <br />mine production for 1996 was approximately 200,000 tons. <br />Federal production for 1996 was 44,500 tons. There was no <br />production from the Colorado state lease. At current <br />production rates, the life of the mine with current reserves <br />would be about 10 to 12 years. Coal sales for 1996 expressed <br />• as a percentage are as follows: <br />1. Cement Production 80-85$ <br />2. Electric Utilities (Japan) 12-15$ <br />3. Domestic 3- 4$ <br />4. Tourist Trains* 1- 2$ <br />*AS a note of interest, National King Coal supplies <br />the narrow gauge railroads (tourist trains) in <br />Durango, Colorado and Chama, New Mexico. <br />Since there are no freight trains serving the area, trucking <br />is the only method of transporting the coal to its markets in <br />New Mexico, Arizona, and Colorado. This is done utilizing the <br />services of approximately 12, 30-ton trucks provided by three <br />major and several independent operators. These trucks are <br />operated by a force of approximately 18 drivers. The coal <br />buyer pays the freight, which generates an additional $3.0 <br />million annually to "satellite industry" for this provided <br />service. <br /> The mine supplies coal for residential heating to local <br /> customers who pick it up in their own trucks or have it <br /> delivered to their homes. This is important to the area <br /> because very few mines in other areas produce or sell lump and <br /> stoker coal. The m ine currently employs 60 people from the <br /> surrounding area. <br />4 <br /> <br />