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111 Illlllllllllllll- sss Doc Date:12/11/2001 • 5~~: 3.02 PERFORMANCE BOND REQUIREMENTS Rule 3.02 In accordance with Rules 3.02 and 3.06, HGCC currently maintains a reclamation performance bond in the amount of $2,300,000. On March 19, 1988 the Division approved bond release in the amount of $855,000 in recognition of satisfactory completion of Phase I reclamation for some 314 acres in the mine pit area. As part of the August 1994 mid-term permit review, the Division set the outstanding reclamation liability at $1,368,313. This amount does not reflect transfer of ownership for the railroad loadout previously owned and permitted by HGCC or the fact that backfilling and grading, revegetation, and drainage control have been completed for all affected lands within the revised HGCC permit boundary. DMG approved TR-61 on June 4, 1993, which authorized the transfer of all reclamation liability associated with the railroad loadout and ancillary facilities from HGCC to Hayden Gulch Terminal Inc. (i.e. Peabody Coal Company). HGCC did not, as part of TR-61, specifically request release of the bond associated with the railroad loadout and ancillary facilities. HGCC had estimated and DMG had approved in 1985 the bond amount for the railroad loadout and ancillary facilities to be $565,483. Concurrent with this technical revision application and pursuant to Rule 3.03.2, HGCC requests complete bond release for the railroad loadout and ancillary facilities. The bond release request includes information on public notice requirements. Upon approval of this bond release request, the amount of the outstanding bond would be reduced to $802,830 (i.e. $1,368,313 less $565,483). Rule 3.03.1(3)(a) specifies that DMG shall hold only that amount of bond that is necessary to • successfully reclaim the permitted area: "Division shall retain that amount for the revegetated area which would be sufficient far a third party to cover the cost of reestablishing revegetatton at any time during the period specified for permittee responsibility...." As noted during DMG's August 1994 mid-term review, the entire mine site has been reclaimed since 1987. Thus HGCC requests as part of this technical revision application and as provided for by Rule 3.02.2(4) that DMG recalculate the bond amount based upon the reclamation responsibilities that currently exist at the H-G Mine. HGCC conservatively estimates the actual total current reclamation liability for the HG Mine is approximately $220,000. HGCC assumes that complete bond release for the entire mine site will be obtained in 1998. Using an estimated mine maintenance and remedial reclamation cost of $66,183 per year and a four yeaz liability period (1995 through 1998) yields a total estimated reclamation liability of 8264,732. Table 11, in Section 2.05.4 of this document, provides a detailed basis for the annual reclamation cost estimate. HGCC understands that the estimate, while conservative, does require certain assumptions regarding the adequacy of revegetation completed to date. Because of those assumptions and the possibility that limited remedial revegetation work could be necessary prior to completion of the 10 year liability period in 1997, HGCC is willing to maintain its reclamation performance bond in the amount of $300,000. Upon the Department's approval, HGCC will send written notice of bond reduction to all parties requiring same under Rule 3.02.2 (4)(a),(b),(c), and 3.02.2(5) as partial fulfillment of the public notice requirement. HGCC proposes that [he draft public notice advertisement provided in Section 2.03.12 of this application also be sent to adjoining property owners and others requiring notice. • H V TPERMIT0.UIFJOl HG M/OJ/%f~IXpm ryl T~-S3 9/446 3.02-t !/~26~y6 Su1tm~TrnL